Title

Voluntary participation in public goods provision with Coasian bargaining

Document Type

Journal article

Source Publication

Journal of Economic Behavior & Organization

Publication Date

6-2016

Volume

126

Issue

Part A

First Page

102

Last Page

119

Publisher

Elsevier BV

Keywords

Coase Theorem, Voluntary participation, Public goods, Laboratory experiments

Abstract

This paper reports findings from an experimental study of voluntary participation games, as considered by Dixit and Olson (2000). The voluntary participation game consists of two stages: a non-cooperative participation decision followed by Coasian bargaining on public goods provision only among those who choose to participate. Our experimental findings show that, consistent with the theoretical findings of Dixit and Olson, the outcome of this game falls short of full efficiency. However, we find that voluntary participation undermines the Coase Theorem to a lesser extent than predicted by Dixit and Olson, particularly with larger numbers of players. We also investigate the effect of pre-play communication on the public goods provision and find little evidence that cheap talk helps subjects coordinate on the efficient outcome of coalition formation in the laboratory.

DOI

10.1016/j.jebo.2016.02.009

Print ISSN

01672681

Publisher Statement

Copyright © 2016 Elsevier B.V. All rights reserved.

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Full-text Version

Publisher’s Version

Recommended Citation

Hong, F., & Lim, W. (2016). Voluntary participation in public goods provision with Coasian bargaining. Journal of Economic Behavior & Organization, 126 (Part A), 102-119. doi: 10.1016/j.jebo.2016.02.009