Voting on Thresholds for Public Goods: Experimental Evidence
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Voting on Thresholds for Public Goods : Experimental Evidence. / Rauchdobler, Julian; Sausgruber, Rupert; Tyran, Jean-Robert.
In: Finanzarchiv, Vol. 66, No. 1, 2010, p. 34-64.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Voting on Thresholds for Public Goods
T2 - Experimental Evidence
AU - Rauchdobler, Julian
AU - Sausgruber, Rupert
AU - Tyran, Jean-Robert
N1 - JEL classification: H41, D72, C92
PY - 2010
Y1 - 2010
N2 - Introducing a threshold in the sense of a minimal project size transforms a public-good game with an inefficient equilibrium into a coordination game with a set of Pareto-superior equilibria. Thresholds may therefore improve efficiency in the voluntary provision of public goods. In our one-shot experiment, we find that coordination often fails and exogenously imposed thresholds are ineffective at best and often counterproductive. This holds over a range of threshold levels and refund rates. We test whether thresholds perform better if they are endogenously chosen, i.e., whether a threshold is approved in a referendum, because voting may facilitate coordination due to signaling and commitment effects. We find that voting does have signaling and commitment effects, but they are not strong enough to significantly improve the efficiency of thresholds.
AB - Introducing a threshold in the sense of a minimal project size transforms a public-good game with an inefficient equilibrium into a coordination game with a set of Pareto-superior equilibria. Thresholds may therefore improve efficiency in the voluntary provision of public goods. In our one-shot experiment, we find that coordination often fails and exogenously imposed thresholds are ineffective at best and often counterproductive. This holds over a range of threshold levels and refund rates. We test whether thresholds perform better if they are endogenously chosen, i.e., whether a threshold is approved in a referendum, because voting may facilitate coordination due to signaling and commitment effects. We find that voting does have signaling and commitment effects, but they are not strong enough to significantly improve the efficiency of thresholds.
KW - Faculty of Social Sciences
KW - provision of public goods
KW - threshold
KW - voting
KW - experiments
U2 - 10.1628/001522110X503370
DO - 10.1628/001522110X503370
M3 - Journal article
VL - 66
SP - 34
EP - 64
JO - FinanzArchiv
JF - FinanzArchiv
SN - 0015-2218
IS - 1
ER -
ID: 20947146