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Altruism, Reputation, and Noise in Linear Public Goods Experiments

Palfrey, Thomas R. and Prisbrey, Jeffrey E. (1993) Altruism, Reputation, and Noise in Linear Public Goods Experiments. Social Science Working Paper, 864. California Institute of Technology , Pasadena, CA. (Unpublished)

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We report the results of a public goods experiment using a design that enables us to directly measure individual response functions in voluntary contributions games and estimate error rates. In addition, following Andreoni (1988), we employ two treatments in order to measure the extent to which voluntary contribution is due to reputation effects. The partners treatment involves a fixed group of subjects playing a repeated game. The strangers treatment approximates a one-shot game by randomly changing group assignments after each play. Our data shows that essentially the only difference between the two treatments is the amount of noise in the data, with the strangers treatment being the noisier of the two. This noise manifests itself in two distinct ways. First, there is more variation of decision rules across subjects in the strangers treatment. Second, individual behavior is, on average, less consistent with a cutpoint decision rule in the strangers treatment, which produces higher estimates of individual error rates. The differences between the strangers and partners data are virtually the same as differences between data from experienced and inexperienced subjects. This suggests an explanation for the finding in Andreoni (1988) that there was greater contribution under the strangers treatment in the standard homogeneous environment in which one direction of errors (under-contribution) are censored. Our results also support his conclusion that reputation effects do not appear to play a prominent role in repeated linear public goods voluntary contribution games. Many findings from past public goods experiments are consistent with our model of random variation in a population of subjects who are, on average, neither altruistic nor spiteful.

Item Type:Report or Paper (Working Paper)
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URLURL TypeDescription ItemPublished Version
Palfrey, Thomas R.0000-0003-0769-8109
Additional Information:We acknowledge the financial support of the National Science Foundation (SBR-9223701) and the Ministerio de Education y Ciencia (DGICYT PB91-0810). We thank Estela Hopenhayn for assistance in preparing and conducting the experiments. Antonio Rangel helped with the translation of instructions from English. We are grateful to our colleagues at both Caltech and Pompeu Fabra for their advice, with special thanks to Antoni Bosch. Published as Palfrey, Thomas R., and Jeffrey E. Prisbrey. "Altruism, reputation and noise in linear public goods experiments." Journal of Public Economics 61, no. 3 (1996): 409-427.
Group:Social Science Working Papers
Funding AgencyGrant Number
Ministerio de Educación y Ciencia (MEC)DGICYT PB91-0810
Subject Keywords:Voluntary contributions, public goods, experiments, reputation, learning, errors.
Series Name:Social Science Working Paper
Issue or Number:864
Classification Code:JEL: 026, 215
Record Number:CaltechAUTHORS:20170823-154709009
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80746
Deposited By: Jacquelyn Bussone
Deposited On:30 Aug 2017 18:53
Last Modified:22 Nov 2019 09:58

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