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Games 2018, 9(3), 43; https://doi.org/10.3390/g9030043

Dynamic Contributions to a Public Project: The Impact of Rising Marginal Benefit and Completion Benefits

1
Department of Economics, Millersville University of Pennsylvania, Millersville, PA 17551-0302, USA
2
Internal Revenue Service, Washington, DC 20333, USA
The views expressed in this article are not necessarily those of the U.S. government.
*
Author to whom correspondence should be addressed.
Received: 24 May 2018 / Revised: 21 June 2018 / Accepted: 23 June 2018 / Published: 1 July 2018
(This article belongs to the Special Issue Public Good Games)
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Abstract

Many public projects are funded in a dynamic manner in which contributors are able to make gradual increases in contributions and condition additional contributions on the cooperation of others. This study presents results from experiments in which subjects with an initial fixed endowment make contributions to a public project gradually over a series of rounds. A 2 × 2 experimental design is used to examine the effectiveness of multiple thresholds that once crossed increase the marginal benefit of a contribution to the public project and the existence of a completion benefit upon project completion. Results reveal that when the multiple threshold design is combined with a completion benefit, overall contributions and project completion rates increase relative to other treatments. Without the presence of a completion benefit, contributions in the multiple threshold design are not significantly different from a constant marginal benefit design. In addition, completion benefits are shown to strongly encourage additional cooperation and project completion. Finally, projects are more likely to be completed when substantial contributions occur in the early rounds. View Full-Text
Keywords: public goods; dynamic; rising marginal benefits; completion benefits public goods; dynamic; rising marginal benefits; completion benefits
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Baker, R.; Halloran, M. Dynamic Contributions to a Public Project: The Impact of Rising Marginal Benefit and Completion Benefits. Games 2018, 9, 43.

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