How to increase and sustain cooperation in public goods games: Conditional commitments via a mediator

Conditional commitment devices, such as price-matching guarantees, legal agreements, and smart contracts, can significantly enhance cooperation and improve outcomes in various scenarios. Despite their potential, empirical evidence of their effectiveness in the context of public goods is limited. Thi...

Full description

Saved in:
Bibliographic Details
Published in:Journal of economic behavior & organization 2024-12, Vol.228, p.106789, Article 106789
Main Authors: Gürdal, Mehmet Y., Gürerk, Özgür, Kaçamak, Yeliz, Kart, Edip
Format: Article
Language:English
Subjects:
Assortative matching
Commitment
Cooperation
Mediator
Prisoner’s dilemma
Public goods
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Conditional commitment devices, such as price-matching guarantees, legal agreements, and smart contracts, can significantly enhance cooperation and improve outcomes in various scenarios. Despite their potential, empirical evidence of their effectiveness in the context of public goods is limited. This paper addresses this gap by demonstrating that conditional and binding commitments can indeed increase voluntary contributions to public goods. We begin by theoretically analyzing the impact of conditional commitments managed by a mediator on public good contributions. Our analysis shows that conditional commitments can be structured to achieve a Pareto Optimal Nash Equilibrium (PONE). We then validate our theoretical findings with laboratory experiments. The results reveal that when a PONE exists, nearly all participant groups adopt conditional commitments and achieve high levels of sustained cooperation. Conversely, when conditional commitments lead to socially inefficient outcomes, their use declines and cooperation levels drop significantly.
ISSN:0167-2681
DOI:10.1016/j.jebo.2024.106789