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The dynamic free rider problem: A laboratory study

Author(s): Battaglini, Marco; Nunnari, S; Palfrey, TR

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Abstract: We report the results of an experiment that investigates free riding in the accumulation of durable public goods. We consider economies with reversibility, where contributions can be positive or negative; and economies with irreversibility, where contributions are nonnegative. Aggregate outcomes support the qualitative predictions of the Markov Perfect Equilibria (MPE) characterized in Battaglini, Nunnari, and Palfrey (2014): steady state levels of public good are lower with reversibility than irreversibility; accumulation is inefficiently slow; and the public good is under- provided in both regimes. On the other hand, public good levels are higher than MPE, and some evidence of history dependence is detected.
Publication Date: Nov-2016
Citation: Battaglini, M, Nunnari, S, Palfrey, TR. (2016). The dynamic free rider problem: A laboratory study. American Economic Journal: Microeconomics, 8 (4), 268 - 308. doi:10.1257/mic.20150126
DOI: doi:10.1257/mic.20150126
ISSN: 1945-7669
EISSN: 1945-7685
Pages: 268 - 308
Type of Material: Journal Article
Journal/Proceeding Title: American Economic Journal: Microeconomics
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

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