Date of this Version
Journal of Public Economics
This study reports the effects of rebate rules on voluntary contributions to a threshold public good. Rebate rules specify how excess contributions, over the threshold amount are distributed. We examine three rebate rules experimentally: a no rebate policy where excess contributions are discarded, a proportional rebate policy where excess contributions are rebated proportionally to an individual's contribution, and a utilization rebate policy where excess contributions provide some continuous public good. Significantly more Nash equilibrium outcomes are observed under the no rebate treatment than under either of the other two. Interestingly, the variance of contributions differs significantly between rebate treatments.
Threshold, public good, rebates, experiment
Marks, M., & Croson, R. (1998). Alternative Rebate Rules in the Provision of a Threshold Public Good: An Experimental Investigation. Journal of Public Economics, 67 (2), 195-220. http://dx.doi.org/10.1016/S0047-2727(97)00067-4
Date Posted: 27 November 2017
This document has been peer reviewed.