We analyze a public good game (PGG) with intragroup competition in which, generally but not always, the dominant strategy is to not contribute; therefore, free riding is the unique Nash equilibrium, not achieving Pareto efficiency. We propose a PGG setup where subjects' contributions are rewarded with different individual returns following a rank-order voluntary contribution mechanism. It is found that the resulting competition for a better return significantly increases contributions. This effect is sensitive to the salience of return differences rewarding higher contributions. Furthermore, the positive effect of return differences on contribution levels depends on an individual's return-to-risk sensitivity as elicited through an independent risk elicitation task.

Intragroup competition in public good games: The role of relative performance incentives and risk attitudes

Morone A.;Temerario T.
2019

Abstract

We analyze a public good game (PGG) with intragroup competition in which, generally but not always, the dominant strategy is to not contribute; therefore, free riding is the unique Nash equilibrium, not achieving Pareto efficiency. We propose a PGG setup where subjects' contributions are rewarded with different individual returns following a rank-order voluntary contribution mechanism. It is found that the resulting competition for a better return significantly increases contributions. This effect is sensitive to the salience of return differences rewarding higher contributions. Furthermore, the positive effect of return differences on contribution levels depends on an individual's return-to-risk sensitivity as elicited through an independent risk elicitation task.
File in questo prodotto:
File Dimensione Formato  
Colasante_et_al-2019-Journal_of_Public_Economic_Theory.pdf

non disponibili

Tipologia: Documento in Post-print
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 1.38 MB
Formato Adobe PDF
1.38 MB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11586/232655
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 5
  • ???jsp.display-item.citation.isi??? 5
social impact