Voluntary Contributions
with Imperfect Information
Annamaria Fiore
University of Bari
M. Vittoria Levati
MPI of Economics, Jena
Andrea Morone
University of Bari
University of Bari
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Motivation
 to examine the effect of incomplete information
on contribution levels
 two-person linear voluntary contribution
mechanism with stochastic marginal benefits from
the public good
 most previous experimental studies performed in
an extremely rich informational environment
Yet, in real life, one hardly knows in
advance the marginal benefit she can derive from a
public good she is asked to finance
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Hipothesis
 A severe lack of information may lower
individuals’ willingness to contribute (Bagnoli and
Lipman, 1989, “complete information […] is a very
strong assumption […]. Incomplete information may
lead to underprovision, p. 585)
 to establish a relationship between attitude to risk
and willingness to contribute (Ledyard, 1995, p. 143)
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Experiment
 Two treatments:
PERFECT INFO
IMPERFECT INFO
Between design
32 participants in each treatment
Computerized (Ztree, Fischbacher, 1999)
Subject pool: students in Economics – recruitment: ORSEE software (Greiner, 2004)
Lab at MPI, Jena, Germany, on February 2005
2 stages:
1° stage: Vickrey auction
2° stage: public goods game & belief elicitation
Currency: ECU (10 ECU = 1€)
Average payoff: 11.7€ per un’ora e mezzo
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Results (1/4)
 The
difference
in
contribution decisions between
treatments is remarkable and
significant (two-sided Wilcoxon
rank-sum tests - based on
averages over players for each
pair as independent unit of
observation – p<0.001 in each of
the first nine periods; p=.92 in
period 10; N = 16; p=.001; N =
16 averaging over all periods).
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Results (2/4)
 1° period: independent obs.
 individual contributions and individual beliefs:
highly significantly correlated (Spearman rank
correlation coefficients are 0.83 in PERFECT INFO,
and 0.80 in IMPERFECT INFO in each treatment)
a statistically significant difference in first-period
beliefs between treatments (one-tailed Wilcoxon
rank-sum test: p-value = .004, N = 32). No
participant is expected to free-ride under perfect
information, whereas 6 subjects hold free-riding
expectations under imperfect information.
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Results (3/4)
beliefs in all periods following the first:
endogenous
correlation analysis between beliefs in period t
about the partner’s contribution in t and the
actual contribution of the partner in period
(Spearman
rank
correlation
coefficients:
PERFECT INFO = .92 IMPERFECT INFO = .98, pvalue < .001, N = 16)
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Relationship risk attitude/willingness
to contribute (4/4)
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Conclusion
Evidence for the impact of imperfect information
on voluntary contribution behavior in linear public
goods games, and for the relationship between risk
attitudes and willingness to cooperate
Linear
efficient?
voluntary
contribution
mechanism:
Political economy perspective: individuals
provided with a good knowledge about their
marginal benefits if requested to contribute
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Thanks for your attention!
Annamaria Fiore
University of Bari
[email protected]
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