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The Dynamic Free Rider Problem: A Laboratory Study

Battaglini, Marco and Nunnari, Salvatore and Palfrey, Thomas R. (2016) The Dynamic Free Rider Problem: A Laboratory Study. American Economic Journal: Microeconomics, 8 (4). pp. 268-308. ISSN 1945-7669. doi:10.1257/mic.20150126.

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We report the results of an experiment that investigates free riding in the accumulation of durable public goods. We consider economies with reversibility, where contributions can be positive or negative; and economies with irreversibility, where contributions are nonnegative. Aggregate outcomes support the qualitative predictions of the Markov Perfect Equilibria (MPE) characterized in Battaglini, Nunnari, and Palfrey (2014): steady state levels of public good are lower with reversibility than irreversibility; accumulation is inefficiently slow; and the public good is under-provided in both regimes. On the other hand, public good levels are higher than MPE, and some evidence of history dependence is detected.

Item Type:Article
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URLURL TypeDescription ItemWorking Paper
Palfrey, Thomas R.0000-0003-0769-8109
Additional Information:© 2016 American Economic Association. We are grateful for comments from a number of seminar audiences at universities and conferences. We thank Lydia Mechtenberg and Steven Matthews for valuable comments. Battaglini gratefully acknowledges financial support from NSF (SES-0418150) and the Alfred P. Sloan Foundation. Palfrey gratefully acknowledges financial support of grants from the National Science Foundation (SES-0962802, SES-1426560), the Gordon and Betty Moore Foundation (SES-1158), and the Russell Sage Foundation. Dustin Beckett and Anselm Rink provided valuable research assistance.
Funding AgencyGrant Number
Alfred P. Sloan FoundationUNSPECIFIED
Gordon and Betty Moore FoundationSES-1158
Russell Sage FoundationUNSPECIFIED
Issue or Number:4
Classification Code:JEL Classification: C91 Laboratory, Individual Behavior; H41 Public Goods
Record Number:CaltechAUTHORS:20161202-123810870
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Official Citation:Battaglini, Marco, Salvatore Nunnari and Thomas R. Palfrey. 2016. "The Dynamic Free Rider Problem: A Laboratory Study." American Economic Journal: Microeconomics, 8(4): 268-308
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:72527
Deposited By: Tony Diaz
Deposited On:02 Dec 2016 22:38
Last Modified:11 Nov 2021 05:03

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