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When does less information translate into more giving to public goods?

Published online by Cambridge University Press:  14 March 2025

Billur Aksoy Open the ORCID record for Billur Aksoy [Opens in a new window]  and
Silvana Krasteva Open the ORCID record for Silvana Krasteva [Opens in a new window]
Billur Aksoy*
Affiliation:
Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180, USA
Silvana Krasteva*
Affiliation:
Department of Economics, Texas A&M University, College Station, TX 77843, USA
*
[email protected]
[email protected]
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Abstract

This paper theoretically and experimentally investigates the impact of information provision on voluntary contributions to a linear public good with an uncertain marginal per-capita return (MPCR). Uninformed donors make contribution decisions based only on the expected MPCR (i.e. the prior distribution), while informed donors observe the realized MPCR before contributing. The theoretical analysis predicts that the impact of information on average contributions crucially depends on the generosity level of the population, modeled as a stochastic change in the pro-social preferences. In particular, a less generous population increases contributions substantially in response to good news of higher than expected MPCR and reduces contributions relatively little in response to bad news of lower than expected MPCR. The opposite is true for a more generous population. Thus, the theory predicts that information provision increases (reduces) average contributions when the population is less (more) generous. This prediction finds strong support in a two-stage lab experiment. The first stage measures subjects’ generosity in the public good game using an online experiment. The resulting measure is used to create more and less generous groups in the public good lab experiment, which varies the information provided to these groups in the lab. The findings are in line with the theoretical predictions, suggesting that targeted information provision to less generous groups may be more beneficial for public good contributions than uniform information provision.

Keywords

Information provisionLinear public good gameOther-regarding preferencesLab experiment

JEL classification

H41: Public Goods C90: General C72: Noncooperative Games
Type
Original Paper
Information
Experimental Economics , Volume 23 , Issue 4 , December 2020 , pp. 1148 - 1177
Copyright
Copyright © 2020 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09643-1) contains supplementary material, which is available to authorized users.

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