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Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis

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Abstract

One important determinant of voluntary contributions to public goods is the value of the public good relative to that of the forgone private good. Isaac, Walker and Thomas (1984) formalized this relation in the Marginal Per Capita Return (MPCR) and demonstrated its influence on the provision of linear public goods. This paper develops a parallel concept, in the context of a threshold public good, the Step Return (SR). After providing a meta-analysis of the effect of SR in previous experiments, we compare contributions in threshold public goods games with low, medium and high SRs. Results show that subjects respond to the SR in this setting just as they respond to the MPCR in the linear public goods setting: higher SRs lead to more contributions.

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Authors and Affiliations

  1. Operations and Information Management, The Wharton School, University of Pennsylvania, Philadelphia, PA, 19104

    Rachel T. A. Croson

  2. School of Business and Economics, Longwood College, Farmville, Virginia, 23909

    Melanie Beth Marks

Authors
  1. Rachel T. A. Croson
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  2. Melanie Beth Marks
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Croson, R.T.A., Marks, M.B. Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis. Experimental Economics 2, 239–259 (2000). https://doi.org/10.1023/A:1009918829192

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