The consequences of a refund in threshold public good games

E. Cartwright; A. Stepanova

doi:10.1016/j.econlet.2015.05.032

The consequences of a refund in threshold public good games

E. Cartwright, A. Stepanova

School of Economics, Finance and Accounting

Research output: Contribution to journal › Article

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 language	English
Pages (from-to)	29-33
Number of pages	5
Journal	Economics Letters
Volume	134
Early online date	11 Jun 2015
DOIs	https://doi.org/10.1016/j.econlet.2015.05.032
Publication status	Published - Sep 2015

Keywords

Public good
Threshold
Refund
Money back guarantee

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Anna Cartwright
- School of Economics, Finance and Accounting - Associate Professor (Academic)
- Faculty Research Centre for Financial & Corporate Integrity - Associate
Person: Teaching and Research

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title = "The consequences of a refund in threshold public good games",

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.",

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AB - 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.

KW - Public good

KW - Threshold

KW - Refund

KW - Money back guarantee

U2 - 10.1016/j.econlet.2015.05.032

DO - 10.1016/j.econlet.2015.05.032

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JO - Economics Letters

JF - Economics Letters

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The consequences of a refund in threshold public good games

Abstract

Keywords

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Anna Cartwright

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