Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146133
Authors: 
Blanco, Esther
Haller, Tobias
Walker, James M.
Year of Publication: 
2016
Series/Report no.: 
Working Papers in Economics and Statistics 2016-16
Abstract: 
The provision of public goods often benefits a larger group than those who actively provide the public good. In an experimental setting, this paper addresses institutional arrangements between subjects who can provide a public good (insiders) and subjects who benefit from the public good but cannot provide it (outsiders). We compare a setting of passive outsiders to situations where outsiders can either make unconditional transfers (donations) or conditional transfers (contracts) to the insiders. The primary behavioral question is to what extent outsiders will respond to the opportunity to subsidize the contributions of insiders and will insiders use such subsidies to increase contributions or simply substitute them for their own contributions. The results suggest the latter. In fact, once conditional or unconditional transfers are allowed, insiders decrease contributions to the public good relative to the baseline condition without transfers.
Subjects: 
Public goods
Institution
Externality
Laboratory Experiment
JEL: 
D70
H41
C92
Document Type: 
Working Paper

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