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- Title
On the performance of rule-based contribution schemes under endowment heterogeneity.
- Authors
Kesternich, Martin; Lange, Andreas; Sturm, Bodo
- Abstract
We experimentally test different rule-based contribution mechanisms in a repeated <italic>4</italic>-player public goods game with endowment heterogeneity and compare them to a <italic>VCM</italic>, distinguishing between a random and an effort-based allocation of endowments. We find that endowment heterogeneities limit the efficiency gains from these rule-based contribution schemes under random allocation. Under effort-based allocations, substantial efficiency gains relative to a <italic>VCM</italic> occur. These are largely driven by significant reductions of contributions in <italic>VCM</italic>, while the rule-based mechanisms generate stable efficiency levels, even though falling short in realizing the maximal efficiency gains. Our results indicate that the procedure of endowment allocation impacts the perception of what constitutes a fair burden sharing.
- Subjects
ENDOWMENT effect (Economics); BEHAVIORAL economics; PUBLIC goods; RESOURCE allocation; COOPERATIVE game theory
- Publication
Experimental Economics, 2018, Vol 21, Issue 1, p180
- ISSN
1386-4157
- Publication type
Article
- DOI
10.1007/s10683-017-9535-2