The Experimetrics of Public Goods: Inferring Motivations from Contributions

In public goods experiments, stochastic choice, censoring and motivational heterogeneity give scope for disagreement over the extent of unselfishness, and whether it is reciprocal or altruistic. We show that these problems can be addressed econometrically, by estimating a finite mixture model to isolate types, incorporating double censoring and a tremble term. Most subjects act selfishly, but a substantial proportion are reciprocal with altruism playing only a marginal role. Isolating reciprocators enables a test of Sugden’s model of voluntary contributions. We estimate that reciprocators display a self-serving bias relative to the model. Copyright Springer Science+Business Media, LLC 2007