Give everybody a voice! The power of voting in a public goods experiment with externalities

Arbeitspapier

We study the effect of voting when insiders´ public goods provision may affect passive outsiders. Without voting insiders´ contributions do not differ, regardless of whether outsiders are positively or negatively affected or even unaffected. Voting on the recommended contribution level enhances contributions if outsiders are unaffected and internalizes the negative externality by lowering contributions when outsiders are negatively affected. Remarkably, voting does not increase contributions when it would be most desirable, i.e. with a positive externality. Here, participants vote for high contributions, yet compliance is poor. Unfavorable payoff comparisons to the outsiders that gain a windfall profit drive contributions down.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Preprints of the Max Planck Institute for Research on Collective Goods ; No. 2014/16

Classification and Topics

• Classification: Wirtschaft ; Public Goods ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Oligopoly and Other Imperfect Markets ; Design of Experiments: Laboratory, Group Behavior ; Design of Experiments: Laboratory, Individual ; Externalities ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
• Subject: experiment ; public good ; externality ; voting

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Engel, Christoph ; Rockenbach, Bettina
• Event: Veröffentlichung
• (who): Max Planck Institute for Research on Collective Goods
• (where): Bonn
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/106907
• Last update: 10.03.2025, 11:43 AM CET