A public good game with technological growth

• Published in: Journal of behavioral and experimental economics Vol. 84; p. 101487
• Main Authors: Ngo, Jacqueline, Smith, Alexander
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier Inc 01.02.2020; Elsevier Science Ltd
• Subjects: Dynamics; Earnings; Growth; Productivity; Public good; Public good game; Technology; Technology adoption; Voluntary contribution mechanism; Public good game; C7; Voluntary contribution mechanism; Growth; Dynamics; C9; H4
• ISSN: 2214-8043; 2214-8051
• DOI: 10.1016/j.socec.2019.101487

•With endogenous growth of the production technology, contributions rise over time.•Contribution patterns are similar with exogenous growth.•These contribution patterns are a strong contrast to when there is no growth. We conduct a public good game with technological growth. In our endogenous growth treatment, subjects invest in the public good production technology (“contribution productivity”) and make contributions to provision. In the exogenous growth treatment, we increase contribution productivity at a rate that matches the growth in the endogenous growth treatment. We also have a control treatment in which there is no growth. With endogenous growth, subjects initially invest high and contribute low amounts, and shift their expenditure from investment to contributions as the rounds proceed. In a second sequence of rounds, average earnings are higher than in the first sequence. While the patterns of contributions are generally similar in the exogenous growth treatment, it is only with endogenous growth that average earnings are higher in the second sequence than in the first.