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Inequity and risk aversion in sequential public good games

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Abstract

Behavioral hypotheses have recently been introduced into public-choice theory (Ostrom in American Political Science Review 92:1–22, 1998). Nevertheless, the individual intrinsic preferences which drive decisions in social dilemmas have not yet been empirically identified. This paper asks whether risk and inequity preferences are behind agents’ behavior in a sequential public good game. The experimental results show that risk aversion is negatively correlated with the contribution decision of first movers. Second movers who are averse to advantageous inequity free-ride less and reciprocate more than do others. Our results emphasize the importance of strategic uncertainty for the correct understanding of which preferences influence cooperation in social dilemmas.

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Correspondence to Sabrina Teyssier.

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Teyssier, S. Inequity and risk aversion in sequential public good games. Public Choice 151, 91–119 (2012). https://doi.org/10.1007/s11127-010-9735-1

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