Crossing the Point of No Return: A Public Goods Experiment

Urs Fischbacher, Werner G�th and Maria Levati

No 72, TWI Research Paper Series from Thurgauer Wirtschaftsinstitut, Universität Konstanz

Abstract: Participants in a public goods experiment receive private or common signals regarding the so-called 'point of no return', meaning that if the group�s total contribution falls below this point, all payoffs are reduced. An individual faces the usual conflict between private and collective interests above the point of no return, while he incurs the risk of damaging everyone by not surpassing the point. Our data reveal that contributions are higher if the cost of not reaching the threshold is high. In particular if the signal is private, many subjects are not willing to provide the necessary contribution.

Keywords: Public goods; provision point mechanism; experiments; reduction factor; signal (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cbe, nep-cta, nep-exp and nep-gth
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Citations: View citations in EconPapers (9)

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Working Paper: Crossing the Point of No Return: A Public Goods Experiment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:twi:respas:0072

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