On the Provision of Public Goods with Probabilistic and Ambiguous Thresholds

Many natural systems involve thresholds that, once triggered, imply irreversible damages for the users. Although the existence of such thresholds is undisputed, their location is highly uncertain. We explore experimentally how threshold uncertainty affects collective action in a series of threshold...

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Bibliographic Details
Published inEnvironmental & resource economics Vol. 61; no. 3; pp. 365 - 383
Main Authors Dannenberg, Astrid, Löschel, Andreas, Paolacci, Gabriele, Reif, Christiane, Tavoni, Alessandro
Format Journal Article
LanguageEnglish
Published Dordrecht Springer Netherlands 01.07.2015
Springer Nature B.V
Subjects
1994
ADAPTATION
Ambiguity
ATES OF AMERICA
Bias
CLIMATE-CHANGE
COLLECTIVE ACTION
COMMUNICATION
Cooperation
Correlation analysis
Economic Policy
Economics
Economics and Business
Economics and Finance
Ekonomi och näringsliv
EN XP
Environmental Economics
Environmental Law/Policy/Ecojustice
Environmental Management
Environmental Studies
Experiment
Experiments
ORGANIZATIONAL BEHAVIOR AND HUMAN DECISION PROCESSES
P11825
P1786
P2291
P367
POINTS
PRIVATE
Probability
Probability distribution
Public good
Public goods
public services and goods
Random variables
Regression analysis
RISK
SOCIAL DILEMMA
Threshold uncertainty
TIPPING
UNCERTAINTY
V105
V108
V60
VOLUNTARY CONTRIBUTIONS
Threshold uncertainty
Q54
H41
Cooperation
Experiment
C92
Public good
Ambiguity
C72
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Summary:Many natural systems involve thresholds that, once triggered, imply irreversible damages for the users. Although the existence of such thresholds is undisputed, their location is highly uncertain. We explore experimentally how threshold uncertainty affects collective action in a series of threshold public goods games. Whereas the public good is always provided when the exact value of the threshold is known, threshold uncertainty is generally detrimental for the public good provision as contributions become more erratic. The negative effect of threshold uncertainty is particularly severe when it takes the form of ambiguity, i.e. when players are not only unaware of the value of the threshold, but also of its probability distribution. Early and credible commitment helps groups to cope with uncertainty.
Bibliography:http://dx.doi.org/10.1007/s10640-014-9796-6
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ISSN:0924-6460
1573-1502
DOI:10.1007/s10640-014-9796-6