Position Uncertainty in a Sequential Public Goods Game: An Experiment

TL;DR

This paper tests theoretical predictions about cooperation in sequential public goods games through experiments, revealing that about 25% of subjects behave as predicted, with diverse behavioral types observed.

Contribution

It provides empirical evidence on position uncertainty effects in public goods games and identifies behavioral heterogeneity among participants.

Findings

Approximately 25% of subjects follow theoretical predictions.

Most subjects are conditional cooperators influenced by others' actions.

A minority exhibit altruism or free-riding behaviors.

Abstract

Gallice and Monz\'on (2019) present a natural environment that sustains full co-operation in one-shot social dilemmas among a finite number of self-interested agents. They demonstrate that in a sequential public goods game, where agents lack knowledge of their position in the sequence but can observe some predecessors' actions, full contribution emerges in equilibrium due to agents' incentive to induce potential successors to follow suit. In this study, we aim to test the theoretical predictions of this model through an economic experiment. We conducted three treatments, varying the amount of information about past actions that a subject can observe, as well as their positional awareness. Through rigorous structural econometric analysis, we found that approximately 25% of the subjects behaved in line with the theoretical predictions. However, we also observed the presence of alternative behavioural types among the remaining subjects. The majority were classified as conditional co-operators, showing a willingness to cooperate based on others' actions. Some subjects exhibited altruistic tendencies, while only a small minority engaged in free-riding behaviour.