Threshold uncertainty in discrete public good games: an experimental study

Abstract

A discrete public good is provided when total contributions equal or exceed the contribution threshold. Recent theoretical work shows that an increase in threshold uncertainty will increase (decrease) equilibrium contributions when the public good value is sufficiently high (low). In an experiment designed to test these predictions, I find only limited verification of the prediction. Using elicited beliefs data to represent subjects' beliefs, I find that behavior is not consistent with expected payoff maximization, however, contributions are increasing in subjects' subjective pivotalness. Thus, wider threshold uncertainty will sometimes-but not alwayshinder collective action.

Do Beliefs About Peers Matter for Donation Matching? Experiments in the Field and Laboratory

“…2 Yet it is highly plausible that beliefs about peers would impact the effectiveness of the match. In non-matching contexts, previous evidence suggests that beliefs about others' contributions are correlated with own contributions in the provision of public goods in the lab and field (Croson, 2007;Fischbacher and Gächter, 2010;McBride, 2010;Fehr and Leibbrandt, 2011) and that information about others' donations can affect own donations (Shang and Croson, 2009;Croson and Shang, 2013;Smith, Windmeijer, and Wright, 2014). While these papers do not study donation matching explicitly, we believe that their findings lend plausibility to the idea that beliefs about peers may also matter in the donation matching context.…”

“…Our laboratory results provide further support for the beliefs explanation, as higher donation rates are associated with higher elicited probabilities of being pivotal to securing the match. The two most closely related papers to our work are Offerman et al (1996) and McBride (2010), which find that in the context of a laboratory threshold public goods game, the likelihood of contribution rises with the belief of being pivotal. Our work differs from Offerman et al (1996) and McBride (2010) in two important ways.…”

“…The two most closely related papers to our work are Offerman et al (1996) and McBride (2010), which find that in the context of a laboratory threshold public goods game, the likelihood of contribution rises with the belief of being pivotal. Our work differs from Offerman et al (1996) and McBride (2010) in two important ways. First, we combine analyses from both the field and the lab.…”

“…3 Interestingly, laboratory threshold public goods games that call for a discrete number of contributors find that as subjects report a higher likelihood of being pivotal to reaching the threshold, they are also more likely to make a contribution (Offerman, Sonnemans, and Schram, 1996;Chen, Au, and Komorita, 1996;McBride, 2010). Here we ask whether this insight can be leveraged to increase donations to a charity.…”

“…In a threshold public goods game the public good in the form of a monetary payoff to the individual is provided if and only if total contributions (or the number of contributors) reach a certain level. See, for example, Isaac, Schmidtz, and Walker (1989); McBride (2010); Anik, Norton, and Ariely (2014). Note that when a threshold public goods game calls for a binary decision (or minimum contributing set; see Van de Kragt, Orbell, and Dawes (1983); Rapoport and Eshed-Levy (1989)), then obtaining the threshold depends only on the number of subjects who contribute.…”