The Effect of Incomplete Information in a Threshold Public Goods Experiment

Fiscal stress and decreasing government budgets have led to renewed interest in voluntary contributions for the funding of public goods. This paper experimentally examines the Provision Point Mechanism (PPM), a voluntary contribution mechanism for the funding of lumpy public goods. Previous research has demonstrated the effectiveness of this mechanism at providing public goods, however all were conducted in an environment of complete information, which fails to capture the uncertainties of the real world. This study tests the efficacy of the PPM in informationally limited settings. We find no significant differences in the rate of successful provisions or level of group contributions when subjects have limited information about the valuations of others than when they have complete information.