Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106907
Authors: 
Engel, Christoph
Rockenbach, Bettina
Year of Publication: 
2014
Series/Report no.: 
Preprints of the Max Planck Institute for Research on Collective Goods 2014/16
Abstract: 
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.
Subjects: 
experiment
public good
externality
voting
JEL: 
H41
D43
L13
C92
C91
D62
D03
H23
Document Type: 
Working Paper

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