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2011
August
P
Public Provision Game
Public Provision Game
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Let’s start with a game. If you follow these instructions carefully, you can - depending on the decisions made by you and other players in the game - earn some money which will be paid to you at the end of the survey.
Please note that your identity will be kept anonymous. You are not allowed to communicate during the game. You can go back to the instructions of the game how many times you wish. Your earnings in this game will be in “tokens.” At the end of the game, the total amount of token you earned will be converted to Swiss Francs at the following rate
1 token = CHF 0.35
INSTRUCTIONS
You are a member of a group consisting of 4 people. Nobody except LINK knows who is in which group. Each group member has to decide on the allocation of 20 token. You can put these 20 tokens in your private account or you can invest them fully or partially into a project. Each point you do not invest into the project, will automatically remain in your private account.
Your income from the private account:
For each token you put into your private account you will earn exactly one token.
For example, if you put all 20 tokens into your private account (and therefore zero tokens into the project) then you will earn exactly 20 tokens from the private account. If instead you put 6 tokens into your private account then you receive an income of 6 tokens from the private account. Nobody except you earns something from your private account.
Your income from the project:
Everybody receives the same income from the token amount you invest into the project. On the other hand, you will also earn an income from the tokens the other group members invest into the project. For each group member the income will be determined as follows
Income from the project = sum of all contributions to the project x 0.6
For example, if the sum of all contributions to the project is 40 tokens, then you and the two other group members will get an income of 40 x 0.6 = 24 tokens out of the project. If the three group members contribute a total of 10 tokens to the project, then you and the two other members of the group each earn 10 x 0.6 = 6 tokens from the project.
Your total income =
Income from your private account (= 20 – your contribution to the project) + Income from the project (= 0.6 × sum of all contributions to the project)
Control Questions:
Please answer the following control questions. Their purpose is to make you familiar with the calculation of incomes that arise from different decisions on how to allocate the endowments.
Instructions
What is your total income?
What are the incomes of the other group members?
and
What is your total income?
What are the incomes of the other group members?
and
Game
Each of the three group members has to make two types of decisions. We will refer to these two decision types as “unconditional contribution” and the “contribution table.”
After all participants of the experiment have made their unconditional contribution decisions and have filled out their conditional contribution table, one member of each group will be selected randomly. For the randomly determined group member only the contribution table will be income-relevant. For the other two group members that are not selected by the random mechanism the unconditional contribution decision will be the income-relevant decision.
When you make your unconditional contribution and when you fill out the contribution table you do not know whether you will be selected randomly. Therefore you will have to think carefully about both types of decisions because both can become relevant for you.
Instructions
Unconditional Contribution
Instructions
How many of the 20 tokens do you want to invest into the project? The difference between 20 and the amount you invest in the project is the amount you put into your private account.
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Contribution Table
Instructions
Now, as last task of the game, please fill in the following “contribution table” where you have to write down in the fields of the right column how many tokens you want to contribute to the project for each possible average contribution of the other group members (rounded up to the next integer) in the left column. In each field f the right column, you must write down an integer number not smaller than zero and not larger than 20.
For example, you must write down how many tokens you want to contribute to the project if the others contribute on average 0 tokens to the project; how many you contribute if the others contribute 1 or 2 or 3 tokens, etc. Your contribution decision will therefore depend on what other group members contribute.
The first column represents the (rounded) average contribution of the other group members to the project, while the second column represents your potential contribution to the project.
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