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  4. November 2016
  5. The Dynamic Free Rider Problem: A Laboratory Study

The Dynamic Free Rider Problem: A Laboratory Study

  • Marco Battaglini
  • Salvatore Nunnari
  • Thomas R. Palfrey
American Economic Journal: Microeconomics
vol. 8, no. 4, November 2016
(pp. 268-308)
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Abstract

We report the results of an experiment that investigates free riding in the accumulation of durable public goods. We consider economies with reversibility, where contributions can be positive or negative; and economies with irreversibility, where contributions are nonnegative. Aggregate outcomes support the qualitative predictions of the Markov Perfect Equilibria (MPE) characterized in Battaglini, Nunnari, and Palfrey (2014): steady state levels of public good are lower with reversibility than irreversibility; accumulation is inefficiently slow; and the public good is under-provided in both regimes. On the other hand, public good levels are higher than MPE, and some evidence of history dependence is detected.

Citation

Battaglini, Marco, Salvatore Nunnari, and Thomas R. Palfrey. 2016. "The Dynamic Free Rider Problem: A Laboratory Study." American Economic Journal: Microeconomics, 8 (4): 268-308. DOI: 10.1257/mic.20150126

Additional Materials

JEL Classification

  • C91 Design of Experiments: Laboratory, Individual
  • H41 Public Goods
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