Heterogeneity, Equity and Voluntary Contributions Toward the Provision of a Public Good
McMaster University
Deptartment of Economics
McMaster University
Draft of November 2005
Abstract
Twenty-four laboratory sessions are conducted to evaluate the roles of communication, information and group heterogeneity when voluntary contributions determine the level of public good provision by small groups of individuals. Simple heterogeneity has one individual in a group having either greater endowment of resources or a greater preference for the public good than the others. Complex heterogeneity exists when one individual in a group has both higher income and greater preference for the public good. Information about income and preference distribution is a treatment variable, but proves to have no statistically significant impact on contributions or payoffs. Without communication, members of heterogeneous groups tend to coordinate more on equal contributions than predicted by a conventional public goods model. The distribution of payoffs within groups exhibits a strong interaction between communication and heterogeneity, leading to less equitable distributions of payoffs as heterogeneity becomes more complex. A model of equity theory helps to organize the results.
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Stuart Mestelman
Department of Economics
McMaster University
Hamilton, Ontario L8S 4M4
Canada
e-mail: mestelma@mcmaster.ca
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