WP318_BKvS_exp_2021

Abstract

By means of three treatments, we identify the causal effect of differences in monetary incentives on the production of social goods allowing for self-selection. The main structure of the experiment is as follows: After participants have read the written instructions and correctly answered a series of control questions, each participant makes decisions in 20 rounds of the following three-stage game. In the first stage, all participants join one of two possible teams. In the second stage, everybody receives an endowment and decides how much of this endowment he keeps for himself and how much he contributes for generating a charitable donation to the Deutsche Krebshilfe. The latter is a well-known German charitable organization that supports the fight against cancer. The allocation decision corresponds to the choice of selfish and social effort in our model above, and the social good is the generated donation. Crucially, the donation a participant generates depends on the share of the endowment the participant contributes and how much the other participants in the same team contribute. In the third stage, all participants receive information on the donation and the private income they have generated and on the average behavior (team choice and average contribution in both teams) of other participants in the given round.