Are prices or quantities the best regulatory instrument to align private actions with public interests in the presence of externalities? We add another dimension to this ongoing debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-off between real CO2 emissions and private monetary payo...

In continuum economies, widespread externalities are those over which each individual has negligible control. Nash–Walrasian equilibria with lump-sum transfers are defined, and their existence proved. They are then characterized by the property of “f constrained Pareto efficiency” for finite coalitions. More general “private good” Nash– Walrasian equilibria are characterized as private good con...

We analyze bargaining over international climate agreements in a setting with incomplete information about abatement costs. Incomplete information is known as one of the key reasons why negotiations may fail more generally, and why efficiency gains cannot be exploited. We ask whether unilateral commitment to high abatement reduces or increases the likelihood for an efficient negotiation outcome...

Evidence suggests little informed giving. To understand this behavior, we examine a model of charitable giving with costly information. We find that an individual who considers a smaller contribution is less likely to seek information, and thus the percentage of informed giving diminishes as the population grows. We also find that a direct grant to the charity exacerbates crowding-out by discou...

We look at privatization in a general equilibrium model of a small, tariff-distorted, open economy. There is a differentiated good produced by both private and public sector enterprises. A reduction in government production in order to cut losses from such production raises the returns to capital and increases the tariff revenue, which are welfare improving. However, privatization also leads to...

We use experimental methods to study the power of leading by words. The context is a voluntary contribution mechanism with oneway communication. One group member can send a free-form text message to his fellow players. Contrary to the commonly-accepted wisdom that the cooperation-enhancing effect of communication requires the mutual exchange of promises, we find that the introduction of one-way...

I use data from the South African Social Giving Survey to investigate the role of social capital and motivations for giving to formal charities and beggars. Results suggest that both impure altruism and inequality aversion positively influence giving to formal charities but they have no influence on giving to beggars. The role of social capital is varied. Members of informal insurance groups ar...

We study the minimal contributing set (MCS) game, a three-person sequential step-level public goods game. The behavior of critical third players changes with experience in this game even though they face no strategic or payoff uncertainty. We explore why these changes occur by manipulating subjects’ experience in the first half of the experiment. The treatments give subjects very different init...

Recent work on public goods contributions has examined the relationship between gender and free-riding behavior in studies using laboratory public goods. This research furthers this line of inquiry by examining gender as a possible explanation of hypothetical bias, which occurs in valuation studies using real world public goods. Results show that gender differences exist in hypothetical valuati...

An environment is studied in which mechanisms suggest public goods allocations and individuals then choose whether or not to submit their requested transfer to the central planner. The set of allocations such that unanimous participation is an equilibrium is shown to be sub-optimal in a wide variety of environments and shrinks to the endowment as the economy is replicated. Optimal public goods ...