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Heterogeneity and the Voluntary Provision of Public Goods

Published online by Cambridge University Press:  14 March 2025

Kenneth S. Chan ,
Robert Moir ,
R. Andrew Muller  and
Stuart Mestelman
Kenneth S. Chan
Affiliation:
Department of Economics, McMaster University, Hamilton, Ontario, L8S 4M4, Canada
Robert Moir
Affiliation:
Department of Economics, University of New Brunswick, PO. Box 5050, Saint John, New Brunswick, E2L 4L5, Canada
R. Andrew Muller
Affiliation:
Department of Economics, McMaster University, Hamilton, Ontario, L8S 4M4, Canada
Stuart Mestelman*
Affiliation:
Department of Economics, McMaster University, Hamilton, Ontario, L8S 4M4, Canada
*
*Corresponding author. email: [email protected]
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Abstract

We investigate the effects of heterogeneity and incomplete information on aggregate contributions to a public good using the voluntary contribution mechanism. The non-linear laboratory environment has three-person groups as partners under varying conditions of information and communication. Bergstrom, Blum and Varian predict that increasing heterogeneity will have no effect on aggregate contributions in a no-communication environment. Ledyard conjectures a positive effect of incomplete information, a negative effect of heterogeneity, and a positive interaction of heterogeneity and incomplete information. We find that incomplete information has a small but significant negative effect. Heterogeneity has a positive effect on aggregate contributions, but its effects interact unexpectedly with communication. In a no-communication environment, heterogeneity in two dimensions (endowment and preferences) increases contributions substantially while heterogeneity in a single dimension (endowment or preferences) has little effect. In the communication environment we find the reverse. We also find a positive interaction between heterogeneity and incomplete information. Thus we reject the Bergstrom, Blume and Varian invariance result and provide mixed evidence on Ledyard's conjectures.

Keywords

public goodsvoluntary provisionheterogeneous agents

JEL classification

H41: Public Goods C92: Laboratory, Group Behavior
Type
Research Article
Information
Experimental Economics , Volume 2 , Issue 1 , August 1999 , pp. 5 - 30
Copyright
Copyright © 1999 Economic Science Association

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