Introduction Literature Design Results Conclusion
Does Financing of Public Goods by Lotteries Crowd Out Pro-Social Incentives?
Peter Katuščák1 Tomáš Miklánek1
1cerge-ei
Prague
Masaryk University December 12, 2013
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
• Design:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
• Design:
• each EUR of contribution buys one lottery ticket
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
• Design:
• each EUR of contribution buys one lottery ticket
• one lottery ticket is drawn at random and wins a fixed prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
• Design:
• each EUR of contribution buys one lottery ticket
• one lottery ticket is drawn at random and wins a fixed prize
• the prize is financed out of the pool of contributions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
• Design:
• each EUR of contribution buys one lottery ticket
• one lottery ticket is drawn at random and wins a fixed prize
• the prize is financed out of the pool of contributions
• Idea:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Introduction
• Provision of public goods by voluntary private contributions (VCM): free-rider problem
• One possible solution: fixed-prize lottery
• Morgan (2000)
o Morgan and Sefton (2000)
• Design:
• each EUR of contribution buys one lottery ticket
• one lottery ticket is drawn at random and wins a fixed prize
• the prize is financed out of the pool of contributions
• Idea:
• provide a monetary incentive to contribute
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
2/38
Introduction Literature Design Results Conclusion
Mechanics of the Effect
• Offsets the positive externality of contributing with a negative externality of diluting the others' probability of winning
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
3/38
Introduction Literature Design Results Conclusion
Mechanics of the Effect
• Offsets the positive externality of contributing with a negative externality of diluting the others' probability of winning
• Increases social efficiency of the Nash equilibrium allocation
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
3/38
Introduction Literature Design Results Conclusion
Mechanics of the Effect
• Offsets the positive externality of contributing with a negative externality of diluting the others' probability of winning
• Increases social efficiency of the Nash equilibrium allocation
• The negative externality is present if an extra 1 EUR lottery ticket reduces the expected winnings for the other participants
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
3/38
Introduction Literature Design Results Conclusion
Mechanics of the Effect
• Offsets the positive externality of contributing with a negative externality of diluting the others' probability of winning
• Increases social efficiency of the Nash equilibrium allocation
• The negative externality is present if an extra 1 EUR lottery ticket reduces the expected winnings for the other participants
• works in fixed-prize lotteries
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
3/38
Introduction Literature Design Results Conclusion
Mechanics of the Effect
• Offsets the positive externality of contributing with a negative externality of diluting the others' probability of winning
• Increases social efficiency of the Nash equilibrium allocation
• The negative externality is present if an extra 1 EUR lottery ticket reduces the expected winnings for the other participants
• works in fixed-prize lotteries
o does not work in parimutuel betting
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
• Concentrate on VCM in the linear public good game
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
• Concentrate on VCM in the linear public good game
• Without beliefs assumptions:
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
• Concentrate on VCM in the linear public good game
• Without beliefs assumptions:
• maximization of social welfare (Laffont 1975)
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
• Concentrate on VCM in the linear public good game
• Without beliefs assumptions:
• maximization of social welfare (Laffont 1975)
• altruism (Becker 1974; Andreoni 1989, 1990)
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
• Concentrate on VCM in the linear public good game
• Without beliefs assumptions:
• maximization of social welfare (Laffont 1975)
• altruism (Becker 1974; Andreoni 1989, 1990)
• prediction: maximum contribution
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
4/38
Introduction Literature Design Results Conclusion
Role of Social Preferences
• People in the field and experimental subjects in the lab often contribute even under VCM:
• Ledyard (1995); Chen (2008); Chaudhuri (2011)
• Not consistent with purely self-regarding preferences
• Can be explained by social preferences
• Concentrate on VCM in the linear public good game
• Without beliefs assumptions:
• maximization of social welfare (Laffont 1975)
• altruism (Becker 1974; Andreoni 1989, 1990)
• prediction: maximum contribution
• not what we see in the data
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
Peter Katušcák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &>
Kirchsteiger 2004) o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
• prediction: contribution positively correlated with beliefs; it can be anything, depending on beliefs and particular preferences
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
• prediction: contribution positively correlated with beliefs; it can be anything, depending on beliefs and particular preferences
• Evidence: conditional cooperation (Fischbacher et al. 2001; Herrmann & Thoni 2009)
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
• prediction: contribution positively correlated with beliefs; it can be anything, depending on beliefs and particular preferences
• Evidence: conditional cooperation (Fischbacher et al. 2001; Herrmann & Thoni 2009)
• use strategy method to elicit contributions conditional on various possible average contributions of the others
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
• prediction: contribution positively correlated with beliefs; it can be anything, depending on beliefs and particular preferences
• Evidence: conditional cooperation (Fischbacher et al. 2001; Herrmann & Thoni 2009)
• use strategy method to elicit contributions conditional on various possible average contributions of the others
• conditional cooperators (50%): positive dependence
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
• prediction: contribution positively correlated with beliefs; it can be anything, depending on beliefs and particular preferences
• Evidence: conditional cooperation (Fischbacher et al. 2001; Herrmann & Thoni 2009)
• use strategy method to elicit contributions conditional on various possible average contributions of the others
• conditional cooperators (50%): positive dependence
• free-riders (33%): always contribute zero
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
5/38
Introduction Literature Design Results Conclusion
Role of Social Preferences (cont'd)
• Assuming one believes that the others contribute a positive amount on average:
• reciprocity (Sugden 1984; Rabin 1993; Dufwenberg &> Kirchsteiger 2004)
o inequality aversion (Fehr &> Schmidt 1999; Bolton &> Ockenfels 2000)
• conformity (Bardsley & Sausgruber 2005)
• prediction: contribution positively correlated with beliefs; it can be anything, depending on beliefs and particular preferences
• Evidence: conditional cooperation (Fischbacher et al. 2001; Herrmann & Thoni 2009)
• use strategy method to elicit contributions conditional on various possible average contributions of the others
• conditional cooperators (50%): positive dependence
• free-riders (33%): always contribute zero
• other types (17%): "hump-shaped," random, etc.
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
• instead, it may be driven by private monetary incentives, namely a desire to win the prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
• instead, it may be driven by private monetary incentives, namely a desire to win the prize
There is evidence of monetary incentives crowding-out pro-social behavior in many domains:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
• instead, it may be driven by private monetary incentives, namely a desire to win the prize
There is evidence of monetary incentives crowding-out pro-social behavior in many domains:
• contract design (Fehr & Gachter 2000; Falk & Kosfeld 2006)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
• instead, it may be driven by private monetary incentives, namely a desire to win the prize
There is evidence of monetary incentives crowding-out pro-social behavior in many domains:
• contract design (Fehr & Gachter 2000; Falk & Kosfeld 2006)
• volunteering (Frey & Goette 1999; Gneezy & Rustichini 2000)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
• instead, it may be driven by private monetary incentives, namely a desire to win the prize
There is evidence of monetary incentives crowding-out pro-social behavior in many domains:
• contract design (Fehr & Gachter 2000; Falk & Kosfeld 2006)
• volunteering (Frey & Goette 1999; Gneezy & Rustichini 2000)
• charitable giving (Meier 2007)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
6/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery
• If positive contributions are driven by reciprocity, introduction of a fixed-prize lottery may have a crowding-out effect on contributions
• others' motivation is no longer necessarily driven by social preferences
• instead, it may be driven by private monetary incentives, namely a desire to win the prize
There is evidence of monetary incentives crowding-out pro-social behavior in many domains:
• contract design (Fehr & Gachter 2000; Falk & Kosfeld 2006)
• volunteering (Frey & Goette 1999; Gneezy & Rustichini 2000)
• charitable giving (Meier 2007)
• trust relationship (Bohnet et al. 2001; Fehr & List 2004)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery (cont'd)
o Crowding-out does not happen if positive contributions are driven by inequality aversion or conformity
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery (cont'd)
o Crowding-out does not happen if positive contributions are driven by inequality aversion or conformity
• Crowding-out, even if present, is not identifiable from a direct comparison of VCM and a fixed-prize lottery
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
7/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery (cont'd)
o Crowding-out does not happen if positive contributions are driven by inequality aversion or conformity
• Crowding-out, even if present, is not identifiable from a direct comparison of VCM and a fixed-prize lottery
• Reason: relative to VCM, a lottery introduces two new effects on contributions:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
7/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery (cont'd)
o Crowding-out does not happen if positive contributions are driven by inequality aversion or conformity
• Crowding-out, even if present, is not identifiable from a direct comparison of VCM and a fixed-prize lottery
• Reason: relative to VCM, a lottery introduces two new effects on contributions:
1. a decrease due to the crowding-out effect
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
7/38
Introduction Literature Design Results Conclusion
Crowding-out Effect of a Lottery (cont'd)
o Crowding-out does not happen if positive contributions are driven by inequality aversion or conformity
• Crowding-out, even if present, is not identifiable from a direct comparison of VCM and a fixed-prize lottery
• Reason: relative to VCM, a lottery introduces two new effects on contributions:
1. a decrease due to the crowding-out effect
2. an increase due to the monetary incentive to win the prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
4. Are these effects sensitive to the size of lottery prize?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
4. Are these effects sensitive to the size of lottery prize?
• Secondary questions (replications):
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
4. Are these effects sensitive to the size of lottery prize?
• Secondary questions (replications):
1. Does introduction of a lottery increase public good provision overall?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
8/38
Introduction Literature Design Results Conclusion
Research Questions
• Primary questions:
1. Does introduction of a lottery crowd-out voluntary contributions?
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
4. Are these effects sensitive to the size of lottery prize?
• Secondary questions (replications):
1. Does introduction of a lottery increase public good provision overall?
2. Is the distribution of types (conditional cooperator, free-rider, others) similar as in the previous studies?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
• Lotteries may be effective in populations dominated by free-riders but perhaps not in populations dominated by conditional cooperators
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
• Lotteries may be effective in populations dominated by free-riders but perhaps not in populations dominated by conditional cooperators
• In the latter case, one may prefer using other designs to increase contributions (matching, thresholds, etc.)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
• Lotteries may be effective in populations dominated by free-riders but perhaps not in populations dominated by conditional cooperators
• In the latter case, one may prefer using other designs to increase contributions (matching, thresholds, etc.)
• Information on the social preference profile of the target population:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
• Lotteries may be effective in populations dominated by free-riders but perhaps not in populations dominated by conditional cooperators
• In the latter case, one may prefer using other designs to increase contributions (matching, thresholds, etc.)
• Information on the social preference profile of the target population:
• small-scale field experiment
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
• Lotteries may be effective in populations dominated by free-riders but perhaps not in populations dominated by conditional cooperators
• In the latter case, one may prefer using other designs to increase contributions (matching, thresholds, etc.)
• Information on the social preference profile of the target population:
• small-scale field experiment
• national survey that includes data on incentivized decisions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Importance
• Effectiveness of using a fixed-prize lottery to finance public goods may depend on the distribution of social preferences in the target population
• Lotteries may be effective in populations dominated by free-riders but perhaps not in populations dominated by conditional cooperators
• In the latter case, one may prefer using other designs to increase contributions (matching, thresholds, etc.)
• Information on the social preference profile of the target population:
• small-scale field experiment
• national survey that includes data on incentivized decisions
• repeated interaction with the population of donors
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
9/38
Introduction Literature Design Results Conclusion
Existing Literature on the Effect of a Fixed-Prize Lottery
• Theory: fixed-prize lottery improves social efficiency in comparison to VCM: • Morgan (2000)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Existing Literature on the Effect of a Fixed-Prize Lottery
• Theory: fixed-prize lottery improves social efficiency in comparison to VCM:
• Morgan (2000)
• Experiments: public good provision increases under lotteries as opposed to VCM:
o Morgan and Sefton (2000)
• Orzen (2008)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
10/38
Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
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Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
• n — number of potential contributors
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
11/38
Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
• n — number of potential contributors
• w — endowment of private good
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
11/38
Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
• n — number of potential contributors
• w — endowment of private good
• a — marginal per-capita return
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
11/38
Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
• n — number of potential contributors
• w — endowment of private good
• a — marginal per-capita return
• R — lottery prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
11/38
Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
• n — number of potential contributors
• w — endowment of private good
• a — marginal per-capita return
• R — lottery prize
• gi — contribution of agent /
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
11/38
Introduction Literature Design Results Conclusion
Example: Linear Public Good Game
• Notation:
• n — number of potential contributors
• w — endowment of private good
• a — marginal per-capita return
• R — lottery prize
• gi — contribution of agent /
• Expected monetary payoff:
E(7T,-) = w - gi + a ( Y,Sj ~ R    + Vn R
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
11/38
Introduction Literature Design Results Conclusion
Example: Linear Public Goods Game (cont'd)
• Symmetric Nash equilibrium contribution
n-1
gi = g =
n2(l - a)
R
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
12/38
Introduction Literature Design Results Conclusion
Example: Linear Public Goods Game (cont'd)
• Symmetric Nash equilibrium contribution:
nz{l — a)
• Equilibrium public good provision:
n[l — a)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
12/38
Introduction Literature Design Results Conclusion
Example: Linear Public Goods Game (cont'd)
• Symmetric Nash equilibrium contribution:
nz{l — a)
• Equilibrium public good provision:
n[l — a)
• It is possible to increase social efficiency by increasing R
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
12/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
• group size: n — 4
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
• group size: n — 4
• endowment of private good: w — 10
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
• group size: n — 4
• endowment of private good: w — 10
• marginal per-capita return: a — 0.75
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
• group size: n — 4
• endowment of private good: w — 10
• marginal per-capita return: a — 0.75
• Dimension 2: size of the lottery prize (between-subject)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
• group size: n — 4
• endowment of private good: w — 10
• marginal per-capita return: a — 0.75
• Dimension 2: size of the lottery prize (between-subject)
1. R = 8
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Experimental Design
• 4x2 factorial design
• Dimension 1: mechanism (within-subject)
1. VCM
2. lottery
3. intermediate, fixed: "I can't win, the others can."
4. intermediate, lottery: "I can win, someone else can't."
• Parametrization:
• group size: n — 4
• endowment of private good: w — 10
• marginal per-capita return: a — 0.75
• Dimension 2: size of the lottery prize (between-subject)
1. R = 8
2. R = 12
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
13/38
Introduction Literature Design Results Conclusion
Details of the Intermediate Treatment
• Intermediate, fixed:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
14/38
Introduction Literature Design Results Conclusion
Details of the Intermediate Treatment
• Intermediate, fixed:
• a subject cannot win the prize and receives a fixed payment of 0.25/? instead
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
14/38
Introduction Literature Design Results Conclusion
Details of the Intermediate Treatment
• Intermediate, fixed:
• a subject cannot win the prize and receives a fixed payment of 0.25/? instead
• the others compete for the prize of 0.75/?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
14/38
Introduction Literature Design Results Conclusion
Details of the Intermediate Treatment
• Intermediate, fixed:
• a subject cannot win the prize and receives a fixed payment of 0.25/? instead
• the others compete for the prize of 0.75/?
Intermediate, lottery:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
14/38
Introduction Literature Design Results Conclusion
Details of the Intermediate Treatment
• Intermediate, fixed:
• a subject cannot win the prize and receives a fixed payment of 0.25/? instead
• the others compete for the prize of 0.75/?
Intermediate, lottery:
• a subject, together with two others, competes for the prize of 0.75/?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
14/38
Introduction Literature Design Results Conclusion
Details of the Intermediate Treatment
• Intermediate, fixed:
• a subject cannot win the prize and receives a fixed payment of 0.25/? instead
• the others compete for the prize of 0.75/?
Intermediate, lottery:
• a subject, together with two others, competes for the prize of 0.75/?
• the remaining group member receives the prize of 0.25/?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
14/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
• Potential solution 1: force minimum contributions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
• Potential solution 1: force minimum contributions
• disadvantage: if contributions can be forced, we can in principle enforce a socially efficient outcome
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
• Potential solution 1: force minimum contributions
• disadvantage: if contributions can be forced, we can in principle enforce a socially efficient outcome
• Potential solution 2: use outside money to finance the prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
• Potential solution 1: force minimum contributions
• disadvantage: if contributions can be forced, we can in principle enforce a socially efficient outcome
• Potential solution 2: use outside money to finance the prize
• Issue 1: where does the outside money come from?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
• Potential solution 1: force minimum contributions
• disadvantage: if contributions can be forced, we can in principle enforce a socially efficient outcome
• Potential solution 2: use outside money to finance the prize
• Issue 1: where does the outside money come from?
• Issue 2: if present, the outside money should be present in all within-subject treatments
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Issue with Financing the Lottery Prize
• Aggregate contributions may be insufficient to finance the lottery prize
• Potential solution 1: force minimum contributions
• disadvantage: if contributions can be forced, we can in principle enforce a socially efficient outcome
• Potential solution 2: use outside money to finance the prize
• Issue 1: where does the outside money come from?
• Issue 2: if present, the outside money should be present in all within-subject treatments
• Issue 3: if so, if not used for the lottery prize (e.g., in VCM), should the money be contributed to the public good or should it be distributed to subjects?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
15/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate: • VCM: each subject receives 0.25/?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
• Implications across within-subject treatments:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
• Implications across within-subject treatments:
• given contributions, the aggregate amount of the private good and the amount of the public good are independent of the treatment
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
• Implications across within-subject treatments:
• given contributions, the aggregate amount of the private good and the amount of the public good are independent of the treatment
• no aggregate wealth effect
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
• Implications across within-subject treatments:
• given contributions, the aggregate amount of the private good and the amount of the public good are independent of the treatment
• no aggregate wealth effect
• equivalent to a forced contribution of 0.25/? per subject
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
• Implications across within-subject treatments:
• given contributions, the aggregate amount of the private good and the amount of the public good are independent of the treatment
• no aggregate wealth effect
• equivalent to a forced contribution of 0.25/? per subject a the same choice space: gj e {0,1,.., 10}
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Our Solution
o Additional R units of the private good on aggregate:
• VCM: each subject receives 0.25/?
• Lottery: finances the lottery prize
• Intermediate: the lottery non-participant receives 0.25/?, the remaining 0.75/? finances the lottery prize
• Implications across within-subject treatments:
• given contributions, the aggregate amount of the private good and the amount of the public good are independent of the treatment
• no aggregate wealth effect
• equivalent to a forced contribution of 0.25/? per subject a the same choice space: g-: e {0,1,.., 10}
• sum of contributions is equal to the amount of the public good (no need to subtract the lottery prize)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
16/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes
• Symmetric risk-neutral Nash equilibrium:
Peter Katuščák , Tomáš Miklánek
Public Goods and Lotteries
17/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes
• Symmetric risk-neutral Nash equilibrium: • no change in individual contribution:
« _ n-1 gl    g ~ n2(l - a)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
17/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes
• Symmetric risk-neutral Nash equilibrium:
• no change in individual contribution:
= -57;-TR
nz(l — a)
• amount of the public good: no subtraction of the lottery prize
G* = ng* = -^-\R n(l — a)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
17/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes
Symmetric risk-neutral Nash equilibrium: • no change in individual contribution:
n- 1
n2(l - a)
R
• amount of the public good: no subtraction of the lottery prize
G* = ng* = -^-\R n(l — a)
• Under our parametrization,
n - 1
— a)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
17/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes
• Symmetric risk-neutral Nash equilibrium:
• no change in individual contribution:
= -57;-TR
nz(l — a)
• amount of the public good: no subtraction of the lottery prize
G* = ng* = -^-\R n(l — a)
• Under our parametrization,
n - 1
~2n-V = °-75
nz{l — a)
• Design constraint: R should be divisible by 4
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
17/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
implies g* — 6
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
• R = 12:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
• R = 12:
• implies g* — 9
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
• R = 12:
• implies g* — 9
• targets the upper-range of the choice space
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
• R = 12:
• implies g* — 9
• targets the upper-range of the choice space
• Further possible values of R:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
• R = 12:
• implies g* — 9
• targets the upper-range of the choice space
• Further possible values of R:
• R — 4: we consider it to be too low of a treatment effect
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Choice of Lottery Prizes (cont'd)
• R = 8:
• implies g* — 6
• targets the mid-range of the choice space
• R = 12:
• implies g* — 9
• targets the upper-range of the choice space
• Further possible values of R:
• R — 4: we consider it to be too low of a treatment effect
• R — 16: implies g* — 12, suggesting a boundary choice of contributions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
18/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations): 1. VCM
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
• Intermediate:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
• Intermediate:
unconditional contributions in the fixed case
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
• Intermediate:
unconditional contributions in the fixed case 2. unconditional contributions in the lottery case (order balanced)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
• Intermediate:
unconditional contributions in the fixed case
2. unconditional contributions in the lottery case (order balanced)
3. conditional contributions in the fixed case
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
• Intermediate:
unconditional contributions in the fixed case
2. unconditional contributions in the lottery case (order balanced)
3. conditional contributions in the fixed case
4. conditional contributions in the lottery case (order balanced)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Within-Subject Stages
• Three stages, order balanced (6 possible permutations):
1. VCM
2. Intermediate
3. Lottery
• VCM and lottery:
1. unconditional contributions
2. contributions conditional on the others' average contribution
• Intermediate:
unconditional contributions in the fixed case
2. unconditional contributions in the lottery case (order balanced)
3. conditional contributions in the fixed case
4. conditional contributions in the lottery case (order balanced)
• Separate printed instructions for each stage, changes relative to the previous stage highlighted
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
19/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages 2. demographic questionnaire
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
2. demographic questionnaire
3. subject payment
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
2. demographic questionnaire
3. subject payment
• Stage timeline:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
2. demographic questionnaire
3. subject payment
• Stage timeline:
1. first part of printed instructions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
2. demographic questionnaire
3. subject payment
• Stage timeline:
1. first part of printed instructions
2. quiz
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
2. demographic questionnaire
3. subject payment
• Stage timeline:
1. first part of printed instructions
2. quiz
3. second part of printed instructions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Logistics
• Sessions in the Laboratory of Experimental Economics,
University of Economics in Prague, in October 2013
• Subjects: mostly students from the University of Economics and other universities in Prague
• Experiments conducted in English
• Experiment timeline:
three stages
2. demographic questionnaire
3. subject payment
• Stage timeline:
1. first part of printed instructions
2. quiz
3. second part of printed instructions
4. inputting of decisions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
20/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
• paying for one of the three stages
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
• paying for one of the three stages
• one subject chosen as the conditional contributor
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
• paying for one of the three stages
• one subject chosen as the conditional contributor
• IM: one subject chosen as the lottery non-participant
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
• paying for one of the three stages
• one subject chosen as the conditional contributor
• IM: one subject chosen as the lottery non-participant
• Exchange rate: 1 ECU = 10 CZK (0.4 EUR)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
• paying for one of the three stages
• one subject chosen as the conditional contributor
• IM: one subject chosen as the lottery non-participant
• Exchange rate: 1 ECU = 10 CZK (0.4 EUR)
• Sessions lasted about 2 hours
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Sample Size and Subject Payments
• Sample size:
1. R — 8: 96 subjects (42 men and 54 women)
2. R — 12: 96 subjects (47 men and 49 women)
• Strategy method:
• paying for one of the three stages
• one subject chosen as the conditional contributor
• IM: one subject chosen as the lottery non-participant
• Exchange rate: 1 ECU = 10 CZK (0.4 EUR)
• Sessions lasted about 2 hours
• Average earnings: 332 CZK (13 EUR), including a 100 CZK (4 EUR) show-up fee
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
21/38
Introduction Literature Design Results Conclusion
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
22/38
Introduction Literature Design Results Conclusion
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
23/38
Introduction Literature Design Results Conclusion
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
24/38
Introduction Literature Design Results Conclusion
Unconditional Contributions: Treatment Effects
	Lottery prize:		Difference:
	R = 8	R = 12	(12) - (8)
Lottery - VCM	1.83***	2 45***	0.63
	(0.33)	(0.35)	(0.48)
IM, Fixed - VCM	-1.03***	-1.31***	-0.28
	(0.32)	(0.40)	(0.51)
Lottery - IM, Fixed	2.86***	3.77***	0.91
	(0.38)	(0.41)	(0.56)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
25/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
• contributes zero in all conditions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
• contributes zero in all conditions
Other (33 subjects):
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
• contributes zero in all conditions
Other (33 subjects):
• full contributor (6 subjects)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
• contributes zero in all conditions
Other (33 subjects):
• full contributor (6 subjects)
• triangular contributor (15 subjects)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
• contributes zero in all conditions
Other (33 subjects):
• full contributor (6 subjects)
• triangular contributor (15 subjects)
• unclassified (12 subjects)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Subject Type Classification
• See how conditional contributions in VCM vary with the average contribution of the other 3 group members (Fischbacher et al. 2001)
• Conditional cooperator (CC) (93 subjects):
• weakly increasing (but not flat) pattern, or
• Spearman correlation positive and significant at 1 percent
• Free-rider (FR) (66 subjects):
• contributes zero in all conditions
Other (33 subjects):
• full contributor (6 subjects)
• triangular contributor (15 subjects)
• unclassified (12 subjects)
• Similar type distribution as in Fischbacher et al. (2001) or Herrmann & Thoni (2009)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
26/38
Introduction Literature Design Results Conclusion
Unconditional Contributions by Type
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
27/38
Introduction Literature Design Results Conclusion
Unconditional Contributions by Type
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
28/38
Introduction Literature Design Results Conclusion
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
29/38
Introduction Literature Design Results Conclusion
Unconditional Contributions by Type
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
30/38
Introduction Literature Design Results Conclusion
Unconditional Contributions: (Lottery - VCM) by Type
	All	Lottery prize:		Difference:
	Subjects	/? = 8	R = 12	(12)-(8)
CCs	1.53***	1 73***	1 34***	-0.44
	(0.28)	(0.50)	(0.31)	(0.58)
FRs	3.53***	2.53***	4 73***	2.21**
	(0.48)	(0.58)	(0.74)	(0.93)
Others	1.12**	0.70	1.77*	1.07
	(0.53)	(0.63)	(0.91)	(1.11)
CCs - FRs	-2.00***	-0.75	-3.39***	_2 54***
	(0.55)	(0.76)	(0.80)	(1.10)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
31/38
Introduction Literature Design Results Conclusion
Unconditional Contributions: (IM, Fixed - VCM) by Type
	All	Lottery prize:		Difference:
	Subjects	/? = 8	R = 12	(12)-(8)
CCs	-1 59***	-0.90*	-2 11***	-1.21
	(0.39)	(0.53)	(0.55)	(0.76)
FRs	-0.89**	-1.19**	-0.53	0.66
	(0.44)	(0.50)	(0.77)	(0.91)
Others	-0.55	-1.00	0.15	1.15
	(0.46)	(0.64)	(0.59)	(0.87)
CCs - FRs	-0.70	0.29	-1.58*	-1.87
	(0.59)	(0.73)	(0.94)	(1.19)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
32/38
Introduction Literature Design Results Conclusion
Unconditional Contributions: (Lottery - IM, Fixed) by Type
	All	Lottery prize:		Difference:
	Subjects	/? = 8	R = 12	(12)-(8)
CCs	3.12***	2.68***	3.45***	0.78
	(0.40)	(0.57)	(0.56)	(0.80)
FRs	4 42***	3.72***	5.27***	1.54
	(0.47)	(0.62)	(0.71)	(0.94)
Others	1 57***	1.7*	1.62*	-0.08
	(0.59)	(0.85)	(0.75)	(1.13)
CCs - FRs	-1.31**	-1.05	-1.81**	-0.77
	(0.62)	(0.84)	(0.90)	(1.23)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
33/38
Introduction Literature Design Results Conclusion
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
34/38
Introduction Literature Design Results Conclusion
Conditional Cooperation and Crowding-out
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
35/38
Introduction Literature Design Results Conclusion
Conditional Contributions
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
36/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions? • yes
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
• not entirely
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
• not entirely
• some crowding out visible also among free-riders (?)
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
• not entirely
• some crowding out visible also among free-riders (?)
• the effect is weakly stronger for conditional cooperators in comparison to free-riders or other types, though, especially for the higher lottery prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
• not entirely
• some crowding out visible also among free-riders (?)
• the effect is weakly stronger for conditional cooperators in comparison to free-riders or other types, though, especially for the higher lottery prize
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
• not entirely
• some crowding out visible also among free-riders (?)
• the effect is weakly stronger for conditional cooperators in comparison to free-riders or other types, though, especially for the higher lottery prize
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
• yes for all types
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion
1. Does introduction of a lottery crowd-out voluntary contributions?
• yes
2. If yes, can we associate such effect with being a conditional contributor in the VCM?
• not entirely
• some crowding out visible also among free-riders (?)
• the effect is weakly stronger for conditional cooperators in comparison to free-riders or other types, though, especially for the higher lottery prize
3. Does introduction of a lottery increase public good provision separately among conditional cooperators, free-riders and the other types?
• yes for all types
• most strongly for free-riders
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
37/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize? • crowding-out overall: no
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
• crowding-out overall: no
• crowding-out by type: no effect for free-riders and others, evidence of larger crowding out under the higher lottery prize among conditional cooperators
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
• crowding-out overall: no
• crowding-out by type: no effect for free-riders and others, evidence of larger crowding out under the higher lottery prize among conditional cooperators
• overall lottery effect: increase with lottery prize only among free-riders
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
• crowding-out overall: no
• crowding-out by type: no effect for free-riders and others, evidence of larger crowding out under the higher lottery prize among conditional cooperators
• overall lottery effect: increase with lottery prize only among free-riders
5. Appears that, under IM, fixed, subjects interpret:
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
• crowding-out overall: no
• crowding-out by type: no effect for free-riders and others, evidence of larger crowding out under the higher lottery prize among conditional cooperators
• overall lottery effect: increase with lottery prize only among free-riders
5. Appears that, under IM, fixed, subjects interpret:
• a low contribution as being pro-social
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
• crowding-out overall: no
• crowding-out by type: no effect for free-riders and others, evidence of larger crowding out under the higher lottery prize among conditional cooperators
• overall lottery effect: increase with lottery prize only among free-riders
5. Appears that, under IM, fixed, subjects interpret:
• a low contribution as being pro-social
• a high contribution as possibly being greedy
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38
Introduction Literature Design Results Conclusion
Conclusion (cont'd)
4. Are these effects sensitive to the size of lottery prize?
• crowding-out overall: no
• crowding-out by type: no effect for free-riders and others, evidence of larger crowding out under the higher lottery prize among conditional cooperators
• overall lottery effect: increase with lottery prize only among free-riders
5. Appears that, under IM, fixed, subjects interpret:
• a low contribution as being pro-social
• a high contribution as possibly being greedy
• the cutoff for a "high" contribution lower under the higher lottery prize
Peter Katuscäk , Tomas Miklänek
Public Goods and Lotteries
38/38