Revisiting Kindness and Confusion in Public Goods Experiments

Abstract

There has been substantial recent interest in determining why there is cooperation in public goods experiments even in environments that provide all subjects with the incentive to free ride (see e.g., John O. Ledyard, 1995). Theories used to explain such cooperation generally posit either that subjects are “confused ” in the sense that they make errors or do not understand the game’s incentives, or that subjects contribute due to social factors such as altruism and reciprocity. Although several authors have pointed out the importance of distinguishing between these alternatives, 1 the roles that confusion and social motives play in determining public contributions remain poorly understood. This paper provides new evidence on the way that confusion and social motives determine contributions in public goods games by reporting data from experiments that use a new design with the Voluntary Contribution Mechanism (VCM). Two important and often replicated findings in the experimental public goods literature are (1) that subjects ’ public contributions are much greater than predicted by standard economic theories of free-riding and (2) that these contributions decay over the course of multiple-round games (see e.g., Douglas D. Davis and Charles A. Holt, 1993). Models that employ social factors to explain cooperation and its decay usually assume that subjects are motivated by altruism,