WHY FREE RIDE? Strategies and Learning in Public Goods Experiments

The free riding hypothesis has been the subject of laboratory experiments for more than a decade. While the extent of free riding has often varied across experiments, three observations are consistently replicated. First, there is no significant evidence of free riding in single-shot games. Marwell and Ames (1981) for instance, found that subjects generally provide the public good at levels halfway between the Pareto efficient level and the free riding level. Second, when subjects play a repeated game, provision of the public good ‘decays’ toward the free riding level with each repetition. This decay phenomenon is observed when subjects know the length of the game for sure [Isaac, Walker and Thomas (1984), Isaac and Walker (1988)], and also when they do not [Isaac, McCue and Plott (1985), Kim and Walker (1984)]. Third, free riding is often approximated after subjects play several trials, although exact free riding is seldom realized. These observations appear to provide mixed support for free riding. It seems clear that the free riding incentives are important subjects consistently attain outcomes that are closer to the free riding levels than the Pareto efficient levels. On the other hand, the exact predictions of the model are seldom confirmed. The phenomenon of decay is particularly pronounced.