When Self-interest is Self-Defeating: The Public Goods Experiment as a Teaching Tool

Abstract

AbstractThis simple classroom experiment demonstrates many of the behavioral phenomena associated with the voluntary provision of a public good. The mechanics of the game are explained in detail and complete instructions are provided, as well as suggestions for follow-up lectures. Influences such as anonymous voting, persuasion, returns to free-riding, and duration of association can be explored in connection with concepts of incentives, individual rationality and group welfare. A number of variations and extensions can be used to incorporate prisoners' dilemmas, incentive compatible mechanisms, negative externalities, and Coasian bargaining.