Discrete Public Goods under Threshold Uncertainty: Theory and Experiment

A discrete public good is provided when total contributions exceed the contribution threshold. I show that for a large class of threshold probability distributions, an increase in threshold uncertainty by 2nd-order stochastic dominance will increase (decrease) equilibrium contributions when the public good value is su ciently high (low). In an experiment designed to test these predictions, behavior only moderately verifies the predictions. Using elicited beliefs data to represent subjects’ beliefs, I find that behavior is not consistent with expected payo maximization, however, contributions are increasing in subjects’ subjective pivotalness. Thus, wider threshold uncertainty will sometimes–but not always–hinder collective action. JEL Classifications: C72, C90, D80.