TÜSİAD-Koç University Economic Research Forum working paper series 1026
We study public goods game where the contribution efforts are observable. When the players are observed, they contribute more and free-riding diminishes significantly. On the other hand, presence of an audience does not affect the performance of players if there is no strategic aspect of the game, i.e. when they play private goods game. The findings are in line with the predictions of the social image theory where a player's contribution is also a signal to an audience regarding how much she cares about contributing to the public goods.