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Games 2018, 9(3), 45; https://doi.org/10.3390/g9030045

Cooperation and Strategic Complementarity: An Experiment with Two Voluntary Contribution Mechanism Games with Interior Equilibria

1
Department of Economics, Turku School of Economics at University of Turku, FI-20014 Turku, Finland
2
Faculty of Management, University of Tampere, FI-33014 Tampere, Finland
Received: 25 May 2018 / Revised: 21 June 2018 / Accepted: 3 July 2018 / Published: 7 July 2018
(This article belongs to the Special Issue Public Good Games)
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Abstract

In public goods game experiments, designs implementing non-linearities in the production are less common than the standard linear setting, especially so under the assumption that the private goods production and public goods aggregation function are both non-linear. We study a voluntary contribution game (VCM) in which returns from the private project have diminishing marginal benefits and the contributions to the joint project exhibit pairwise strategic complementarities. As a control, we use a public goods game with an identical private production technology, but with the standard linear public goods aggregation. In addition to the aggregation technology, we manipulate the group size variable: In both treatments, the subjects will first play a VCM game in groups of five for 20 rounds, after which the group size is reduced to two, and the game is played for another 20 rounds. A significant over-contribution is observed in both settings when the group size is five. The rate of over-contribution is much higher under the complementary technology, but as predicted by theory, the contributions drop drastically when the group size is reduced from n = 5 to n = 2 within this treatment. Our experiment also provides empirical evidence that the so-called group size effect is present in both treatments, but it is much weaker under the standard aggregation technology. View Full-Text
Keywords: cooperation; complementarity; laboratory experiment; public goods game cooperation; complementarity; laboratory experiment; public goods game
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Lappalainen, O. Cooperation and Strategic Complementarity: An Experiment with Two Voluntary Contribution Mechanism Games with Interior Equilibria. Games 2018, 9, 45.

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