FEEM Research Seminar on “Parochialism and the efficiency of multi-level public goods provision”
12:30 - 14:00
Co-Authors: C. Gallier, J. Lohse, C. Reif & D. Römer
Empirical and experimental evidence raises the possibility that parochialism, i.e. individuals’ narrow concern for local outcomes, will inevitably interfere with efficiency in the multi-level social dilemmas familiar from environmental policy. We conduct a web-based artifactual field experiment that studies the contribution behavior of over 600 participants in a multi-level public goods game with smaller (local) groups nested in larger (regional) groups. Using an inter-neighborhood intra-region design, subjects allocate an endowment between a personal account, a local public good account, and a regional public good account. A between-subjects design with two treatment dimensions, one disclosing a shared neighborhood identity in the smaller group and the other varying the MPCR of the regional account, provides the source of variation. We find that knowledge of a common neighborhood identity does not interfere with subjects shifting contributions to the regional public good in response to a higher MPCR. This result challenges the idea that shared identity makes the private provision of public goods at the efficient scale necessarily more difficult. The result also holds for subjects with home-grown above-median neighborhood identification and for subjects primed towards identification. . In our artifactual field experiment, therefore, efficiency can be said to survive parochial bias.