This website uses third party cookies to improve your experience. If you continue browsing or close this notice, you will accept their use.

RANK-ORDER COMPETITION IN THE VOLUNTARY PROVISION OF IMPURE PUBLIC GOODS

19 October 2017 at 12:01 PM - 1:00 PM

Room 207, Campus on Viale Romania, 32

Speaker: Andrej Angelovski, LUISS

Publicly provided goods often create differential payoffs due to timely or spatial distances of group members. We design and test a provision mechanism which utilizes rank competition to mitigate free-riding in impure public goods. In our Rank-Order Voluntary Contribution Mechanism (Rank-Order-VCM) group members compete via observable contributions for a larger share of the public good; high contributors receive preferential access (a larger share), while low contributors receive restricted access (a lower share). In a laboratory experiment Rank Order-VCM elicits median contributions equal to the full endowment throughout the finitely played games with constant groups. In the control treatment, with randomly assigned ranks, the contributions are significantly lower and decline over time. We thus provide evidence of rank competition, in situations where discriminatory access to public goods is possible, being efficiency enhancing.