An Application of the English Clock MarketMechanism to Public Goods Games

We conducted a laboratory study with a public goods game in which contributions are notsubmitted all at once but incrementally as coordinated in real time by a clock. Individualspress a button as soon as the clock equals their willingness to contribute. This publicgoods institution exploits the idea that people are conditionally cooperative (i.e., theymatch at least the minimum contribution of the others) rather than opportunistic in orderto implement the Pareto-optimal outcome. By providing information about the point atwhich subjects stopped further contributions we found that the decision of a subject tostop contributing induced an immediate reaction of the other group members. As aconsequence, the individual contributions were closely related to each other and a fairerincome distribution was achieved than in the standard case in which only aggregatedinformation was supplied after each period.