Voting by Ballots and Feet in the Laboratory

Innocenti, Alessandro; Rapallini, Chiara

doi:10.2139/ssrn.1741104

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2014

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“…The alternative channel is shown to improve welfare. Innocenti and Rapallini (2011) have a similar finding. Putterman, Tyran et al (2011) give groups a chance to vote on binding sanctions.…”

Section: Related Literaturesupporting

confidence: 64%

Give Everybody a Voice! The Power of Voting in a Public Goods Experiment with Externalities

Engel

Rockenbach

2014

SSRN Journal

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We study the effect of voting when insiders' public goods provision may affect passive outsiders. Without voting insiders' contributions do not differ, regardless of whether outsiders are positively or negatively affected or even unaffected. Voting on the recommended contribution level enhances contributions if outsiders are unaffected and internalizes the negative externality by lowering contributions when outsiders are negatively affected. Remarkably, voting does not increase contributions when it would be most desirable, i.e. with a positive externality. Here, participants vote for high contributions, yet compliance is poor. Unfavorable payoff comparisons to the outsiders that gain a windfall profit drive contributions down.

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Section: Related Literaturesupporting

confidence: 64%