Cost-(in)effective public good provision: An experimental exploration
Chan, Nathan W.; Knowles, Stephen; Peeters, Ronald; Wolk, Leonard
This paper investigates the determinants of cost-(in)effective giving to public goods. We conduct a pre-registered experiment to elucidate how factors at the institutional and individual levels shape individual contributions and the cost-effectiveness of those contributions in a novel public good game. In particular, we examine the role of consequential uncertainty over the value of public good contributions (institutional level) as well as individual characteristics like risk and ambiguity attitudes, giving type, and demographics (individual level). We nd that consequential uncertainty tends to reduce overall contributions, but not the cost-effectiveness of those contributions. Meanwhile, cost-effectiveness varies by giving type-which is a novel result that is consistent with hypotheses we generate from theory-but other individual characteristics have little influence on contributions or cost-effectiveness. Our work has important positive and normative implications for charitable giving and public good provision in the real world, and it is particularly germane to emerging online crowdfunding and patronage platforms that confront users with a multitude of competing opportunities for giving.
Publisher: University of Otago
Series number: 2102
Keywords: Risk; ambiguity; cost-effectiveness; public goods; charity
Research Type: Discussion Paper
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