1 results for Undergraduate, 'The carrot or the stick?' Achieving the voluntary provision of a public good with a reward or sanction mechanism

  • 'The carrot or the stick?' Achieving the voluntary provision of a public good with a reward or sanction mechanism

    Hall, Phillip J (2003-10)

    Undergraduate thesis
    University of Otago

    This study investigates the effect of compliance mechanisms on contributions to a public good fund in an experimental context. Thirty-six participants, matched by gender and trust level into nine groups of four participants, were recruited from a first year economics course. They participated in an experiment in which they were asked to contribute funds to public and private accounts. In addition, they were asked in the experimental conditions to contribute to a reward fund, a sanction fund, or both. The results of the experiment show that, while both sanctioning and rewarding mechanisms are equally effective at inducing participants to contribute to a public good fund, the presence of a reward mechanism is critical in raising participant earnings. No effect of trust was found, but evidence of differences between male and female behaviour over trials was found. The results of the study emphasise the importance of taking account of agent heterogeneity and personality factors when examining the public good problem, as well as the need for good experimental design. Future research is needed to examine the effect of reward or sanctioning level on contributions and profit. Individual and social factors also warrant further attention.

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