Time-Dependent Strategies in Repeated Asymmetric Public Goods Games

Abstract The public goods game is among the most studied metaphors of cooperation in groups. In this game, individuals can use their endowments to make contributions towards a good that benefits everyone. Each individual, however, is tempted to free-ride on the contributions of others. Herein, we study repeated public goods games among asymmetric players. Previous work has explored to which extent asymmetry allows for full cooperation, such that players contribute their full endowment each round. However, by design that work focusses on equilibria where individuals make the same contribution each round. Instead, here we consider players whose contributions along the equilibrium path can change from one round to the next. We do so for three different models – one without any budget constraints, one with endowment constraints, and one in which individuals can save their current endowment to be used in subsequent rounds. In each case, we explore two key quantities: the welfare and the resource efficiency that can be achieved in equilibrium. Welfare corresponds to the sum of all players’ payoffs. Resource efficiency relates this welfare to the total contributions made by the players. Compared to constant contribution sequences, we find that time-dependent contributions can improve resource efficiency across all three models. Moreover, they can improve the players’ welfare in the model with savings.