The author reports the results of two experiments that study cooperation in public goods games when agents have private, unobservable incentives. While mechanisms such as communication and peer punishment have been shown to consistently promote cooperation in standard public goods experiments, relatively little is known about the effectiveness of such mechanisms in groups with heterogeneous incentives. The author therefore designed a simple voluntary contribution mechanism game, in which group members differ in both their dominant strategy contributions and socially optimal contributions, and test the effectiveness of each mechanism in this game. The author found that allowing participants to communicate increases cooperation – especially when participants are permitted to discuss private information – while punishment is under-used and ineffective. A follow-up experiment focuses on when simply asking participants to reveal their private payoff information increases contributions. Treatments are conducted in which individuals either do not report their payoff type, report to their group members, report to group members who can punish them, or report to a binding mechanism that charges them the socially optimal contribution for their message. In all cases, messages are non-verifiable and participants are told that they are free to lie. When participants are able to report their type, either to their group members or to a binding mechanism, they contribute more. Further, the misreporting of type is less frequent, considered more dishonest, and punished more harshly than free-riding. Consistent with work showing that weak punishment can backfire, the punishment mechanism is also underutilized in this environment and its presence negates the positive effect of sharing information.
Micro Seminars EUR
- Speaker(s)
- Andrea Robbett (Middlebury College, United States)
- Date
- Friday, September 18, 2015
- Location
- Rotterdam