scispace - formally typeset
Search or ask a question
Journal Article•DOI•

A simple mechanism for the efficient provision of public goods - experimental evidence

Josef Falkinger1, Ernst Fehr2, Simon Gächter2, Rudolf Winter-Ebmer3•
University of Regensburg1, University of Zurich2, Johannes Kepler University of Linz3
01 Mar 2000-The American Economic Review (American Economic Association)-Vol. 90, Iss: 1, pp 247-264
TL;DR: In this paper, a series of experiments designed to investigate the factor of incentive mechanisms in the case of private provisions of public goods is presented. But the results showed that the proposed incentive mechanism is very promising.
Abstract: The author reports on a series of experiments designed to investigate the factor of incentive mechanisms in the case of private provisions of public goods. In the Control treatment, there was no mechanism so that subjects faced strong free-riding incentives. In the so-called Falkinger mechanism treatment, the author implemented the Falkinger mechanism. The studies explored the impact of the mechanism in different economic environments. Results showed that the proposed incentive mechanism is very promising. Section I of the paper introduces the mechanism to be examined. Section II discusses the experimental design. Empirical results are provided in Section III, and Section IV interprets these results followed by a summary.

Summary (1 min read)

Jump to:  and [Summary]

Summary

  • In the Control treatment, there was no mechanism so that subjects faced strong free-riding incentives.
  • The studies explored the impact of the mechanism in different economic environments.
  • Results showed that the proposed incentive mechanism is very promising.
  • Empirical results are provided in Section III, and Section IV interprets these results followed by a summary.

Did you find this useful? Give us your feedback

Content maybe subject to copyright    Report

University of Zurich
Zurich Open Repository and Archive
Winterthurerstr. 190
CH-8057 Zurich
http://www.zora.unizh.ch
Year: 2000
A simple mechanism for the efficient provision of public goods:
experimental evidence
Falkinger, Josef; Fehr, Ernst; Gächter, Simon; Winter-Ebmer, Rudolf
Falkinger, Josef; Fehr, Ernst; Gächter, Simon; Winter-Ebmer, Rudolf. A simple mechanism for the efficient
provision of public goods: experimental evidence. American Economic Review 2000, 90(1):247-264.
Postprint available at:
http://www.zora.unizh.ch
Posted at the Zurich Open Repository and Archive, University of Zurich.
http://www.zora.unizh.ch
Originally published at:
American Economic Review 2000, 90(1):247-264
Falkinger, Josef; Fehr, Ernst; Gächter, Simon; Winter-Ebmer, Rudolf. A simple mechanism for the efficient
provision of public goods: experimental evidence. American Economic Review 2000, 90(1):247-264.
Postprint available at:
http://www.zora.unizh.ch
Posted at the Zurich Open Repository and Archive, University of Zurich.
http://www.zora.unizh.ch
Originally published at:
American Economic Review 2000, 90(1):247-264
A simple mechanism for the efficient provision of public goods:
experimental evidence
Abstract
The author reports on a series of experiments designed to investigate the factor of incentive mechanisms
in the case of private provisions of public goods. In the Control treatment, there was no mechanism so
that subjects faced strong free-riding incentives. In the so-called Falkinger mechanism treatment, the
author implemented the Falkinger mechanism. The studies explored the impact of the mechanism in
different economic environments. Results showed that the proposed incentive mechanism is very
promising. Section I of the paper introduces the mechanism to be examined. Section II discusses the
experimental design. Empirical results are provided in Section III, and Section IV interprets these results
followed by a summary.
Citations
More filters
Journal Article•DOI•
New hope for the voluntary contributions mechanism: The effects of context☆

[...]

Kent D. Messer1, Homa Zarghamee2, Harry M. Kaiser3, William D. Schulze3•
University of Delaware1, Santa Clara University2, Cornell University3
01 Sep 2007-Journal of Public Economics
TL;DR: This paper examined how three common contextual factors can affect contributions in the linear voluntary contributions mechanism (VCM) and showed that context can make the VCM produce sustained efficiencies similar to incentive-compatible public-good mechanisms.

58 citations

Journal Article•DOI•
Market Selection and Survival of Investment Strategies

[...]

Rabah Amir1, Igor V. Evstigneev2, Thorsten Hens3, Klaus Reiner Schenk-Hoppé4•
University College London1, University of Manchester2, University of Zurich3, University of Copenhagen4
01 Feb 2005-Journal of Mathematical Economics
TL;DR: The authors analyzes the process of market selection of investment strategies in an incomplete market of short-lived assets and shows that an investor allocating wealth across the assets according to their conditional expected payoffs eventually accumulates total market wealth, provided the investor's strategy is asymptotically distinct from the portfolio rule suggested by the CAPM.

55 citations

Journal Article•DOI•
Dynamics of Illegal Participation in Peer-to-Peer Networks—Why Do People Illegally Share Media Files?

[...]

Jan U. Becker, Michel Clement
01 Jan 2006-Journal of Media Economics
TL;DR: A dynamic perspective in the user's willingness to share is followed that allows researchers to provide implications on the stability of the networks in the long term, because the users' behavior may lead to the collapse of illegal networks.
Abstract: The rise of peer-to-peer networks starting with Napster in 1999 and later KaZaA and eMule had a substantial impact on the online distribution of media content. Millions of users at any given point of time illegally offer copyright protected files and internalize the cost of their behavior. Whereas it is easy to explain why users download files, it remains an open question as to why they provide data, because it is not necessary to get access to files. This article addresses the issue of why users take the risk and illegally provide files. In a theoretical analysis relying on game theoretical assumptions, this article shows in a dynamic context that users actually do follow a rational strategy by providing files. This article underlines the theoretical assumptions with two empirical studies. The first study researches the individual motives for file sharing by using a structural equation model. Reciprocity is one of the key drivers to offer files. The second study segments users based on their motives into...

54 citations

Journal Article•DOI•
Relative performance of two simple incentive mechanisms in a public goods experiment

[...]

Juergen Bracht1, Charles Figuieres2, Marisa Ratto•
University of Aberdeen1, Institut national de la recherche agronomique2
01 Feb 2008-Journal of Public Economics
TL;DR: It is found that both mechanisms lead to an increase in the level of contributions to the public goods, however, the Falkinger mechanism predicts the average level of Contributions more reliably than the compensation mechanism.

54 citations

Posted Content•DOI•
Are Stock Options the Managers' Blessing? Stock Option Compensation and Institutional Controls

[...]

Matthias Benz1, Marcel Kucher1, Alois Stutzer2, Alois Stutzer3•
University of Zurich1, Institute for the Study of Labor2, University of Basel3
01 Apr 2001-Social Science Research Network
TL;DR: In this article, it is argued that stock options compared to other forms of compensation have created strong incentives for managers to engage in lobbying activities for higher compensation, and empirical results presented for the S&P 500 firms and the years from 1992 to 1997 show that the relative success of such skimming activities is shaped by institutional controls.
Abstract: Stock option grants to top managers have largely contributed to the dramatic increase in US executive pay in recent years. In this paper it is argued that stock options, compared to other forms of compensation, have created strong incentives for managers to engage in lobbying activities for higher compensation. The empirical results presented for the S&P 500 firms and the years from 1992 to 1997 show that the relative success of such skimming activities is shaped by institutional controls. Stock option grants are substantially lower when control by the board of directors and the shareholders is higher, and competition on the product market of a firm is stronger.

54 citations

References
More filters
Book•
An introduction to the bootstrap

[...]

Bradley Efron1, Robert Tibshirani•
South Dakota School of Mines and Technology1
01 Jan 1993
TL;DR: This article presents bootstrap methods for estimation, using simple arguments, with Minitab macros for implementing these methods, as well as some examples of how these methods could be used for estimation purposes.
Abstract: This article presents bootstrap methods for estimation, using simple arguments. Minitab macros for implementing these methods are given.

37,183 citations

Book•
Nonparametric statistics for the behavioral sciences

[...]

Sidney Siegel
01 Jan 1956
TL;DR: This is the revision of the classic text in the field, adding two new chapters and thoroughly updating all others as discussed by the authors, and the original structure is retained, and the book continues to serve as a combined text/reference.
Abstract: This is the revision of the classic text in the field, adding two new chapters and thoroughly updating all others. The original structure is retained, and the book continues to serve as a combined text/reference.

35,552 citations

Journal Article•DOI•
z-Tree: Zurich toolbox for ready-made economic experiments

[...]

Urs Fischbacher
07 Feb 2007-Experimental Economics
TL;DR: Z-Tree as mentioned in this paper is a toolbox for ready-made economic experiments, which allows programming almost any kind of experiments in a short time and is stable and easy to use.
Abstract: z-Tree (Zurich Toolbox for Ready-made Economic Experiments) is a software for developing and conducting economic experiments. The software is stable and allows programming almost any kind of experiments in a short time. In this article, I present the guiding principles behind the software design, its features, and its limitations.

9,760 citations

Journal Article•DOI•
A theory of fairness, competition and cooperation

[...]

Ernst Fehr1, Klaus M. Schmidt2•
University of Zurich1, Ludwig Maximilian University of Munich2
01 Aug 1999-Quarterly Journal of Economics
TL;DR: This paper showed that if some people care about equity, the puzzles can be resolved and that the economic environment determines whether the fair types or the selesh types dominate equilibrium behavior in cooperative games.
Abstract: There is strong evidence that people exploit their bargaining power in competitivemarkets butnot inbilateral bargainingsituations. Thereisalsostrong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained, although punishment is costly for those who punish. This paper asks whether there is a simple common principle that can explain this puzzling evidence. We show that if some people care about equity the puzzles can be resolved. It turns out that the economic environment determines whether the fair types or the selesh types dominate equilibrium behavior.

8,783 citations

Journal Article•DOI•
The Pure Theory of Public Expenditure

[...]

Paul A. Samuelson
01 Nov 1954-The Review of Economics and Statistics
TL;DR: In this paper, the authors propose a method to use the information of the user's interaction with the service provider in order to improve the quality of the service provided to the user.
Abstract: Классическая работа лаурета Нобелевской премии по экономике Пола Самуэльсона, заложившая основу современной теории общественных благ. В статье формулируются условия выбора оптимального объема предоставления общественного блага, ныне присутствующие в любом учебнике микроэкономики и экономики общественного сектора.

6,105 citations

Related Papers (5)
A theory of fairness, competition and cooperation

[...]

01 Aug 1999-Quarterly Journal of Economics
Ernst Fehr, Klaus M. Schmidt
Cooperation and Punishment in Public Goods Experiments

[...]

01 Sep 2000-The American Economic Review
Ernst Fehr, Simon Gächter
z-Tree: Zurich toolbox for ready-made economic experiments

[...]

07 Feb 2007-Experimental Economics
Urs Fischbacher
Public Goods: A Survey of Experimental Research

[...]

31 Dec 1995-Research Papers in Economics
John O. Ledyard
Motivation, Knowledge Transfer, and Organizational Forms

[...]

01 Nov 1999-Social Science Research Network
Margit Osterloh, Margit Osterloh, Bruno S. Frey