ISSN:
1573-6938
Keywords:
public goods
;
voluntary provision
;
heterogeneous agents
;
H41
;
C92
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
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 significantnegative effect. Heterogeneity has apositive 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.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF01669132
Permalink
