TY - JOUR

T1 - Asymmetric heterogeneities and the role of transfers in a public goods experiment

AU - Koessler, Ann Kathrin

AU - Müller, Julia

AU - Zitzelsberger, Sonja

N1 - Funding Information: This work was financially supported by the European Union (EU) Horizon 2020 program, action ERC-2014-STG, Project HUCO, Grant Number 636746. The experiment was approved by the Institutional Review Board of the German Association for Experimental Economic Research (https://gfew.de/ethik/qpAfJtwu). We thank Astrid Dannenberg, the editor David K. Levine and three anonymous reviewers for their valuable comments. We thank G. Simmonett for the proofreading of the manuscript.

PY - 2023/10

Y1 - 2023/10

N2 - Previous experimental research has shown that cooperation is especially challenging in situations involving heterogeneous actors. Here, we investigate the effect of allowing unconditional transfers in a public goods game when actors differ asymmetrically in their endowments and productivity levels. Under this setup, full efficiency, in terms of highest maximum group payoff, can only be achieved with the full transfer of resources from the players with high endowment and low productivity to the players with high productivity but low endowment. We show that, in this setting, the availability of transfers enhances public good provision and cooperation. The voluntary transfer serves as a powerful cooperative signal, leading to high contribution rates among the recipients. However, if the transfer possibility is given but not used, cooperation erodes.

AB - Previous experimental research has shown that cooperation is especially challenging in situations involving heterogeneous actors. Here, we investigate the effect of allowing unconditional transfers in a public goods game when actors differ asymmetrically in their endowments and productivity levels. Under this setup, full efficiency, in terms of highest maximum group payoff, can only be achieved with the full transfer of resources from the players with high endowment and low productivity to the players with high productivity but low endowment. We show that, in this setting, the availability of transfers enhances public good provision and cooperation. The voluntary transfer serves as a powerful cooperative signal, leading to high contribution rates among the recipients. However, if the transfer possibility is given but not used, cooperation erodes.

KW - Cooperation

KW - Heterogeneity

KW - Inequality

KW - Public goods game

KW - Transfers

UR - http://www.scopus.com/inward/record.url?scp=85171676310&partnerID=8YFLogxK

U2 - 10.1016/j.euroecorev.2023.104561

DO - 10.1016/j.euroecorev.2023.104561

M3 - Article

AN - SCOPUS:85171676310

VL - 159

JO - European economic review

JF - European economic review

SN - 0014-2921

M1 - 104561

ER -