The consequences of a refund in threshold public good games

E. Cartwright, A. Stepanova

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

We revisit the question of whether a refund increases efficiency in threshold public good games. New experimental evidence is presented on the effect of endowment size. We demonstrate that a refund increases efficiency if and only if the endowment is small relative to the threshold. We also propose a novel way to analyze the effect of a refund. Specifically, we argue that a refund increases efficiency only if significantly many groups converge towards zero contributions in the absence of a refund.
Original languageEnglish
Pages (from-to)29-33
Number of pages5
JournalEconomics Letters
Volume134
Early online date11 Jun 2015
DOIs
Publication statusPublished - Sep 2015

Keywords

  • Public good
  • Threshold
  • Refund
  • Money back guarantee

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