Public Good Experiments with large Groups in a virtual laboratory

• Applicant: Professor Dr. Joachim Weimann
• Subject Area: Economic Theory
• Term: from 2010 to 2015
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 172700485

Public goods are often characterized by the fact that they need to be provided by large groups but that the return each agent receives for their contribution for the provision of the public good (as measured by the MPCR-marginal rate of substitution) is very small. It has not been possible to investigate this combination (large groups, small MPCR) in previous laboratory experiments on public goods because the MPCR is bounded from below by 1/N and the size of N (the number of subjects) is limited for several reasons. The aim of project WE 2027/10-1 is to, for the first time, carry out public goods experiments with large groups with small MPCRs under laboratory conditions. This is made possible by combining four separate laboratories into one large laboratory. Up until now the project has enabled us to successfully carry out experiments with groups of 8, 60, and 100 subjects and MPCRs of 0.25, 0.04 and 0.02. The results of this work have proved to be very interesting thus far and are partially presented in a first working paper. We observed, in particularly, a strong MPCR effect whilst group size has no noteworthy influence. A surprising result was that large groups of 100 subjects with an MPCR of 0.04 showed a very similar level of cooperation to small groups (N=8) with a large MPCR (0.25). A direct comparison of these two combinations is rather difficult, however, since both the group size and the MPCR parameters were varied. However, it is possible to say that there must be an interaction between group size and MPCR effect which has so far not been recognized. The aim of the projects continuation is to win additional insights into the interplay of these two effects through more experiments and a new design. With the experiments previously carried out regarding the purchasing of emissions rights a group of 60 subjects was used. There was a relatively stable and constant average contribution of 20-25% of the initial endowment. However, the contributions follow a different pattern than in the public goods experiments.

• DFG Programme: Research Grants
• Participating Persons: Professorin Dr. Jeannette Brosig-Koch; Dr. Heike Hennig-Schmidt; Professorin Dr. Claudia Keser