Conference Agenda
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Public goods provision and equity Location: Auditorium B: Frøystein Gjesdal Session Chair: Benjamin Ouvrard, GAEL, INRAE | |
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Cooperation, inequality, and equity in the endogenous choice of institutions to provide public goods 1: Humboldt University Berlin, Germany; 2: Free University of Bozen-Bolzano; 3: Max Planck Institute for Research on Collective Goods, Bonn and ZEW - Leibniz Centre for European Economic Research, Mannheim. Global collective action by sovereign and heterogeneous actors is crucial to limit global warming and avoid dangerous climate change. We study how the willingness of heterogeneous agents to join a coalition to provide a public good depends on how the costs are shared within the coalition and how this decision is made. The decision to share the burden within the coalition is either made democratically or it is imposed exogenously. Burden sharing rules can range from equal contributions for all members, regardless of their endowments, to fully proportional to agents’ endowments. We investigate the effectiveness of the different procedural approaches by combing theoretical considerations with causal evidence from a highly controlled laboratory experiment. We find that the option to democratically decide on the burden sharing rule has an impact on the participation decision. Grand coalitions are more likely to be formed when the burden sharing decision is made democratically. In addition, our results show that additional individual contributions are driven by the distributional dimension of the coalition, both for members and for non-members of the coalition. Regarding altruistic behavior, we find that participants are motivated by warm-glow motives rather than by pure altruism. | |