Does Uncertainty Deter Provision of Public Goods?

Abstract

We study a finitely repeated public goods game (based on the voluntary contribution mechanism) played under complete uncertainty about the marginal benefit of the public good relative to the private consumption (commonly known as the marginal per capita return): neither one's marginal per capita return nor other players' marginal per capita returns are known at the time of decisionmaking. We show that contributions are equivalent when the rate of return is predetermined and when it is uncertain, and display a similar decay over time. Combined with the previous experimental findings, our results suggest that the cooperation in public goods games is sensitive to the source of uncertainty about marginal per capita return.

Cooperation in a risky world

“…Second, our study contributes to the recent experimental investigations of the effects of environmental randomness on the provision of public goods. Together with the recent studies by Levati and Morone (), Boulu‐Reshef et al (), and Björk et al () (but notwithstanding Cárdenas et al, ; Levati et al, ), the results of our experiment point to the robustness of the standard patterns of cooperation not only across different domains of (noncompetitive) risk but also across different domains of (noncompetitive) randomness: risk, ambiguity, and uncertainty.…”

“…Their main finding is that behavior is sensitive to the variations in one's own MPCR, but not to the presence of the environmental uncertainty about other players’ MPCRs . In a similar vein, Boulu‐Reshef, Brott, and Zylbersztejn () propose an experiment in which environmental uncertainty about MPCR takes the form of an individual random draw from a uniform distribution, so that neither personal MPCR nor other players’ MPCRs are known to any individual at the time of decision‐making. They also report that cooperation is neutral to the presence of environmental uncertainty.…”

“…For instance, Levati and Morone () and Björk et al () report a null result based on a larger spread than the one adopted herein (0.6 vs. 0.9, and 0.3 vs. 0.9, respectively; MPCR in the riskless condition is always mean‐preserving). Boulu‐Reshef et al () also report a null result based on an experiment, in which MPCR is drawn from a continuous uniform distribution ranging from 0.3 to 0.75. However, it does matter whether calibration of the MPCR lottery is such that the social dilemma nature of the game is maintained for any realization or not.…”

Common-value public goods and informational social dilemmas

“…Other studies find that a negative response of uncertain public-good returns on cooperation may depend on the parameterization of the marginal benefits (Levati and Morone, 2013) and the order in which subjects experience uncertainty (Stoddard, 2015). Still other studies find no evidence that uncertain public-good returns change contribution behavior (Stoddard, 2017;Boulu-Reshef et al, 2017;Theroude and Zylbersztejn, 2017). 2 Overall, these studies show somewhat mixed results about the effect of uncertainty per se on contribution, sensitive to experimental design and parameterization.…”

An Economic Approach to Alleviate the Crises of Confidence in Science: With An Application to the Public Goods Game

“…sets the stage for our non-parametric analysis, showing average round contributions aggregated by rounds for all treatments and periods with constant MPCR levels 11. Unless otherwise noted, all results from pairwise comparisons are from two-sided non-parametric Wilcoxon Mann-Whitney tests.Table 1 also reports p-values corrected for multiple hypothesis testing (see List et.…”