Does heterogeneity spoil the basket? The role of productivity and feedback information on public good provision

Angelovski, Andrej ORCID: https://orcid.org/0000-0003-3011-8002, Di Cagno, Daniela, Guth, Werner, Marazzi, Francesca and Panaccione, Luca (2018) Does heterogeneity spoil the basket? The role of productivity and feedback information on public good provision. Journal of Behavioral and Experimental Economics, 77 . pp. 40-49. ISSN 2214-8043 [Article] (doi:10.1016/j.socec.2018.09.006)

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Abstract

In a circular neighborhood of eight, each member contributes repeatedly to two local public goods, one with the left and one with the right neighbor. All eight two-person games provide only local feedback information and are structurally independent in spite of their overlapping player sets. Heterogeneity is induced intra-personally by asymmetric productivity in left and right games and inter-personally by two randomly selected group members who are less privileged (LP) by being either less productive or excluded from end-of-period feedback information about their payoffs and neighbors’ contributions. Although both LP-types let the neighborhood as a whole evolve less cooperatively, their spillover dynamics differ. While less productive LPs initiate “spoiling the basket” via their low contributions, LPs with no-end-of-round information are exploited by their neighbors. Furthermore, LP-positioning, closest versus most distant, affects how the neighborhood evolves.

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