Unraveling public good games

Article, Other literature type, Report, Preprint English OPEN
Branas-Garza, Pablo ; Espinosa, María Paz (2011)
  • Publisher: MDPI
  • Journal: volume 2, issue 4 11, pages 1-18 (issn: 2073-4336)
  • Related identifiers: doi: 10.3390/g2040434
  • Subject: public good games | Public good game | experiments | beliefs | public good game, end game effect, beliefs. | public good games; end-game effects; beliefs; experiments | End game effect | end-game effects
    • jel: jel:D64 | jel:H41 | jel:C70 | jel:C91 | jel:C73 | jel:C72 | jel:C71 | jel:C | jel:C7
      ddc: ddc:330
    mesheuropmc: human activities

This paper provides experimental evidence on how players predict end-game effects in a linear public good game. Our regression analysis yields a measure of the relative importance of priors and signals on subjects’ beliefs on contributions and allows us to conclude that, first, the weight of the signal is relatively unimportant, while priors have a large weight and, second, priors are the same for all periods. Hence, subjects do not expect end-game effects and there is very little updating of beliefs. We argue that the sustainability of cooperation is related to this pattern of belief formation.
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