Heterogeneity and the Voluntary Provision of Public Goods

Kenneth Chan, Stuart Mestelman, Robert Moir and R. Muller

Experimental Economics, 1999, vol. 2, issue 1, 5-30

Abstract: We investigate the effects of heterogeneity and incomplete information on aggregate contributions to a public good using the voluntary contribution mechanism. The non-linear laboratory environment has three-person groups as partners under varying conditions of information and communication. Bergstrom, Blum and Varian predict that increasing heterogeneity will have no effect on aggregate contributions in a no-communication environment. Ledyard conjectures a positive effect of incomplete information, a negative effect of heterogeneity, and a positive interaction of heterogeneity and incomplete information. We find that incomplete information has a small but significant negative effect. Heterogeneity has a positive effect on aggregate contributions, but its effects interact unexpectedly with communication. In a no-communication environment, heterogeneity in two dimensions (endowment and preferences) increases contributions substantially while heterogeneity in a single dimension (endowment or preferences) has little effect. In the communication environment we find the reverse. We also find a positive interaction between heterogeneity and incomplete information. Thus we reject the Bergstrom, Blume and Varian invariance result and provide mixed evidence on Ledyard's conjectures. Copyright Kluwer Academic Publishers 1999

Keywords: public goods; voluntary provision; heterogeneous agents (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (171)

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Working Paper: Heterogeneity and the Voluntary Provision of Public Goods (1998)
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DOI: 10.1023/A:1009984414401

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