Hostname: page-component-7b9c58cd5d-g9frx Total loading time: 0 Render date: 2025-03-15T17:31:27.279Z Has data issue: false hasContentIssue false

Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis

Published online by Cambridge University Press:  14 March 2025

Rachel T. A. Croson
Affiliation:
Operations and Information Management, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104
Melanie Beth Marks
Affiliation:
School of Business and Economics, Longwood College, Farmville, Virginia 23909

Abstract

One important determinant of voluntary contributions to public goods is the value of the public good relative to that of the forgone private good. Isaac, Walker and Thomas (1984) formalized this relation in the Marginal Per Capita Return (MPCR) and demonstrated its influence on the provision of linear public goods. This paper develops a parallel concept, in the context of a threshold public good, the Step Return (SR). After providing a meta-analysis of the effect of SR in previous experiments, we compare contributions in threshold public goods games with low, medium and high SRs. Results show that subjects respond to the SR in this setting just as they respond to the MPCR in the linear public goods setting: higher SRs lead to more contributions.

Type
Research Article
Copyright
Copyright © 1999 Economic Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Andreoni, J. (1990). “Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?Economic Journal. 100, 464477.CrossRefGoogle Scholar
Asch, P., Gigliotti, G., and Polito, J. (1993). “Free Riding with Discrete and Continuous Public Goods: Some Experimental Evidence.” Public Choice. 77, 293305.CrossRefGoogle Scholar
Bagnoli, M. and Lipman, B. (1989). “Provision of Public Goods: Fully Implementing the Core through Private Contributions.” Review of Economic Studies. 56, 583601.CrossRefGoogle Scholar
Bagnoli, M. and McKee, M. (1991). “Voluntary Contributions Games: Efficient Private Provision of Public Goods.”. Economic Inquiry. 29, 351366.CrossRefGoogle Scholar
Cadsby, C. and Maynes, E. (1998a). “Choosing between a Socially Efficient and Free-Riding Equilibrium: Nurses versus Economics and Business Students.” Journal of Economic Behavior and Organization. 37, 183192.CrossRefGoogle Scholar
Cadsby, C. and Maynes, E. (1998b). “Gender and Free Riding in a Threshold Public Goods Game: Experimental Evidence.” Journal of Economic Behavior and Organization. 34, 603620.CrossRefGoogle Scholar
Coats, J. and Gronberg, T. (1996). “Provision of Discrete Public Goods: An Experimental Investigation of Alternative Institutions.” Working Paper, Texas A&M University.Google Scholar
Croson, R. and Marks, M. (1998). “Identifiability of Individual Contributions in a Threshold Public Goods Experiment.” Journal of Mathematical Psychology. 42, 167190.CrossRefGoogle Scholar
Croson, R. and Marks, M. (1999). “The Effect of Recommended Contributions on the Voluntary Provision of Public Goods.” Working Paper, 98-02-04 OPIM, The Wharton School, University of Pennsylvania.Google Scholar
Davis, D. and Holt, C. (1993). Experimental Economics. Princeton University Press, Princeton.CrossRefGoogle Scholar
Dawes, R., Orbell, J., Simmons, R., and van de Kragt, A. (1986). “Organizing Groups for Collective Action.” American Political Science Review. 80, 11711185.CrossRefGoogle Scholar
Erev, I. and Rapoport, A. (1990). “Provision of Step-Level Public Goods: The Sequential Contribution Mechanism.” Journal of Conflict Resolution. 34, 401425.CrossRefGoogle Scholar
Greene, W. (1990). Econometric Analysis. Macmillan Publishing Company, New York.Google Scholar
Isaac, M., Schmidtz, D., and Walker, J. (1989). “The Assurance Problem in a Laboratory Market.” Public Choice. 62, 217236.CrossRefGoogle Scholar
Isaac, M., Walker, J., and Thomas, S. (1984). “Divergent Evidence on Free-riding: An Experimental Examination of Possible Explanations.” Public Choice. 43, 113149.CrossRefGoogle Scholar
Johnson, L. (1996). “Bayesian Nash Equilibria in a Public-Goods Experiment with a Provision Point.” Working Paper, Rutgers University.Google Scholar
Ledyard, J. (1995). “Public Goods: A Survey of Experimental Results.” In Kagel, John and Roth, Alvin (eds.), The Handbook of Experimental Economics. Princeton University Press, Princeton; pp. 111194.CrossRefGoogle Scholar
Marks, M. and Croson, R. (1998). “Alternative Rebate Rules in the Provision of a Threshold Public Good: An Experimental Investigation.” Journal of Public Economics. 67, 195220.CrossRefGoogle Scholar
Marks, M. and Croson, R. (1999). “The Effect of Incomplete Information in a Threshold Public Goods Experiment.” Public Choice. 99, 103118.CrossRefGoogle Scholar
Mysker, M., Olson, P., and Williams, A. (forthcoming). “The Voluntary Provision ofa Threshold Public Good: Further Experimental Results.Research in Experimental Economics.Google Scholar
Offerman, T., Sonnemans, J., and Schram, A. (1996). “Value Orientations, Expectations and Voluntary Contributions in Public Goods.” The Economic Journal. 106, 817845.CrossRefGoogle Scholar
Palfrey, T. and Rosenthal, H. (1991a). “Testing Game-Theoretic Models of Free Riding: New Evidence on Probability Bias and Learning.” In Palfrey, Thomas (ed.), Laboratory Research in Political Economy. University of Michigan Press, Ann Arbor, pp. 239268.Google Scholar
Palfrey, T. and Rosenthal, H. (1991b). “Testing for Effects of Cheap Talk in a Public Goods Game with Private Information.” Games and Economic Behavior. 3, 183220.CrossRefGoogle Scholar
Palfrey, T. and Rosenthal, H. (1994). “Repeated Play, Cooperation, and Coordination: An Experimental Study.” Review of Economic Studies, 61, 545565.CrossRefGoogle Scholar
Rapoport, A. (1988). “Provision of Step-Level Public Goods: Effects of Inequality in Resources.” Journal of Personality and Social Psychology. 54, 432440.CrossRefGoogle Scholar
Rapoport, A. and Eshed-Levy, D. (1989). “Provision of Step-Level Public Goods: Effects of Greed and Fear of Being Gypped.” Organizational Behavior and Human Decision Processes. 44, 325344.CrossRefGoogle Scholar
Rapoport, A. and Suleiman, R. (1993). “Incremental Contribution in Step-Level Public Goods Games with Asymmetric Players.” Organizational Behavior and Human Decision Processes. 55, 171194.CrossRefGoogle Scholar
Rhodes, C. (1997). “Leaders and Followers in a Public Good Problem: Some Experimental Evidence.” Working Paper, Rice University.Google Scholar
Rondeau, D., Schulze, W., and Poe, G. (1999). “Voluntary Revelation of the Demand for Public Goods Using a Provision Point Mechanism.” Journal of Public Economics. 72, 455470.CrossRefGoogle Scholar
Rose, S., Clark, J., Poe, G., Rondeau, D., and Schulze, W. (1997). “The Private Provision of Public Goods: Tests of a Provision Point Mechanism for Funding Green Power Programs.” Working Paper 97-09, Cornell University.Google Scholar
Sonnemans, J., Schram, A., and Offerman, T. (1998). “Public Good Provision and Public Bad Prevention: The Effect of Framing.” Journal of Economic Behavior and Organization. 34, 143161.CrossRefGoogle Scholar
Suleiman, R. and Rapoport, A. (1992). “Provision of Step-level Public Goods with Continuous Contribution.” Journal of Behavioral Decision Making. 5, 133153.CrossRefGoogle Scholar
van de Kragt, A., Orbell, J., and Dawes, R. (1983). “The Minimal Contributing Set as a Solution to Public Goods Problems.” American Political Science Review. 77, 112122.CrossRefGoogle Scholar