Absolute Versus Relative : Asymmetric Framing in a Heterogeneous-Endowment Public Goods Game

Individual contributions to public goods can be framed in absolute or relative metrics. We examine how the framing salience affects the contribution behavior when group members are heterogeneously endowed, based on a reference-dependent theory with salience weights allocated to the absolute or relative reference points. We test our theory through an experimental design where the framing is either uniform (absolute or relative for all players) or asymmetric for players with different endowments. We find that absolute framing incentivizes higher public goods contributions than the relative framing does, while the asymmetric framing with relative for high-type and absolute for low-type members leads to similarly high contribution levels compared to the absolute framing but different profit distributions among members. Comparing the experimental outcomes and theoretical predictions, we discuss the competing effects of framing salience and the self-serving bias on contribution behavior. Our study contributes to a better understanding of burden-sharing rules in the context of absolute and relative framing, and provides implications for related public policies for public goods