Delegation and Public Pressure in a Threshold Public Goods Game
12:00 - 13:30
This paper is co-authored by Doruk Iris, Sogang University, Jungmin Lee, Sogang University and Institute for the Study of Labor (IZA) and Alessandro Tavoni, London School of Economics, Grantham Research Institute on Climate Change and Environment
Provision of global public goods, such as climate change mitigation and fisheries management directed at avoiding overharvesting, requires coordination of national contributions, which is implemented by elected governments who in turn are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and then ask them to elect a delegate by secret voting. The elected delegates successively play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among team members, including the delegate. We find that delegation slightly reduces the overall group contributions. Public pressure in the form of teammates’ messages to their delegate, on the other hand, has a significant negative effect on contributions, although the messages are designed to be payoff-inconsequential, cheap talk that is. The reason behind this negative finding is that delegates tend to focus on the ‘bad suggestions’, namely on the lowest contribution to the public good that is suggested by the teammates.