Operations, Information and Decisions Papers

Document Type

Journal Article

Date of this Version

2-1998

Publication Source

Journal of Public Economics

Volume

67

Issue

2

Start Page

195

Last Page

220

DOI

10.1016/S0047-2727(97)00067-4

Abstract

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.

Keywords

Threshold, public good, rebates, experiment

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Date Posted: 27 November 2017

This document has been peer reviewed.