Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/122155
Authors: 
Feige, Christian
Ehrhart, Karl-Martin
Year of Publication: 
2015
Series/Report no.: 
Working Paper Series in Economics, Karlsruher Institut für Technologie (KIT) 73
Abstract: 
In a laboratory experiment, we investigate if groups consisting of two heterogeneous player types (with different marginal contribution costs) can increase their total contributions and payoffs in a threshold public goods game if transfer payments are possible among the players. We find that transfer payments are indeed used in many groups to shift contributions from high-cost players to low-cost players, thereby not only increasing social welfare, but also equalizing payoffs. In a repeated setting with individual voluntary contributions and transfers, this redistribution effect takes a few rounds to manifest and high-cost players benefit the most in terms of payoffs. The same beneficial effect of transfer payments can also be achieved in a one-shot setting by having the groups vote unanimously on contributions and transfers of all players.
Subjects: 
threshold public good
transfer payments
experimental economics
unanimous voting
committee
heterogeneity
JEL: 
C92
D71
H41
Document Type: 
Working Paper

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