In a two-stage public goods experiment, we study the effect that subjects’ possibility of contributing to a public good in the first stage of the game has on the voluntary contributions to the second public good. Our results show that subjects do not follow either the Nash strategy or the Pareto efficient strategy and that they perceive the two public goods as substitutes. JEL Classification: A...

This paper presents a game theoretic model in which some fraction of output is appropriated from entrepreneurs. Entrepreneurs are able to form a league to prevent this appropriation, but this might not be individually rational because of either the free rider problem or coordination failure. The model also shows that poorer countries are less able to form this league and so might not be able to...

Many public goods that are provided by coalitions have a group-size e¤ect. Namely, people prefer to consume a public good in a larger coalition. This paper studies local public goods games with anonymous and separable group-size e¤ect. The core is nonempty when coalition feasible sets are monotonic and players’preferences over public goods satisfy a condition called cardinal connectedness. More...

In a two-stage public goods experiment, we study the framing effect due to the adoption of a cultural context. Our results show a slight increase in the allocations of subjects’ endowments to the cultural good when the cultural context is implemented in the laboratory. In particular, in one treatment, the framing effect has a strong impact in the last two periods only. JEL Classification: A13, ...

We characterize the outcomes of games when players may make binding o ers of strategy contingent side payments before the game is played. This does not always lead to eÆcient outcomes, despite complete information and costless contracting. The characterizations are illustrated in a series of examples, including voluntary contribution public good games, Cournot and Bertrand oligopoly, principal-...

Experimental work in economics prompted the development of theories of other-regarding behavior. In this paper we reanalyze two classic public goods experiments and focus on the nature individuals’ responses to others’ behavior in order to help distinguish alternative motives of giving, including altruism, warm glow, reciprocity and inequality aversion. Analysis that allows for asymmetric feedb...

In the presence of spillovers, decentralized provision of local public goods may lead to a higher surplus than centralized provision even though localities have identical preferences. Indeed, free-riding costs associated to decentralization can be lower than the costs of rent-seeking and influence activities under centralization. Actually, centralization yields a higher level of regional surplu...

That individuals contribute in social dilemma interactions even when contributing is costly is a wellestablished observation in the experimental literature. Since a contributor is always strictly worse off than a non-contributor the question is raised if an intrinsic motivation to contribute can survive in an evolutionary setting. Applying stochastic evolutionary dynamics we give conditions for...