Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry and Efficiency

We find that a process of voluntary association where individuals express a preference about whom they want to be associated with can create strong incentives to increase efficiency and contributions in provision of a public good. This process of endogenous group formation perfectly sorted contribut...

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Bibliographic Details
Published in:The Economic journal (London) 2005-10, Vol.115 (506), p.1032-1053
Main Authors: Page, Talbot, Putterman, Louis, Unel, Bulent
Format: Article
Language:English
Subjects:
Bonding
Cooperation
Cost efficiency
Data analysis
Economic efficiency
Economic sanctions
Economic sociology
Economic theory
Experiment design
Experiments
Free rider effect
Game theory
Group dynamics
Group incentives
Incentives
P values
Prisoners
Public good
Public goods
Social relations
Studies
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Summary:We find that a process of voluntary association where individuals express a preference about whom they want to be associated with can create strong incentives to increase efficiency and contributions in provision of a public good. This process of endogenous group formation perfectly sorted contributions by the order of group formation. Comparison of middle and last period behaviour suggests that a majority of the subject population are conditional cooperators, with a minority of monetary payoff maximisers. The experiment illustrates that under favourable conditions, where the opportunities of entry and exit are symmetrically balanced, a process of voluntary association can mitigate the free-rider problem.
ISSN:0013-0133
1468-0297
DOI:10.1111/j.1468-0297.2005.01031.x