Partners vs. Strangers: Identification of the Group Membership in the Contribution to Public Goods
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Keywords
Public Goods Game, Contribution, Free-rider, Learning
Abstract
This paper studies the effect of experience, the inter-temporal strategy and the group size as the possible explanations to the highest levels of contribution to equilibrium in a game of public goods. All these variables together allow capturing the effect of the group membership; keeping in mind that the more information collected about its members' behavior, the greater the levels of contribution. Therefore, treatment was implemented in which subjects interact in a group with permanent members (partners), and other treatment where the group changes randomly in each round (strangers). In addition, crossed treatments were carried out, in which first stage partners or strangers’ status is surprisingly changed in the second stage of the experiment. Groups of four or five members were considered to analyze the effect of the group size. Results show that the average contribution is positive and gradually converges to the Nash equilibrium as repetitions increase. Although there is evidence in favor of the intertemporal strategy, it critically depends on the stability of the group's composition. Regarding the group size, four-member groups show a higher average contribution.
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