Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 08/2009: Playing with the Good Guys: A Public Good Game with Endogenous Group Formation

Kjell Arne Brekke (), Karen Evely Hauge (), Jo Thori Lind () and Karine Nyborg ()
Additional contact information
Kjell Arne Brekke: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Karen Evely Hauge: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Jo Thori Lind: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Karine Nyborg: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: In public good games, voluntary contributions tend to start o high and decline as the game is repeated. If high contributors are matched, however, contributions tend to stay high. We propose a formalization predicting that high contributors will selfselect into groups committed to charitable giving. Testing this experimentally, we let subjects choose between two group types, where one type donate a xed amount to a charity. Contributions in these groups stayed high, whereas contributions in the other groups showed the well known declining pattern. One implication is that corporate social responsibility may attract more responsible employees.

Keywords: Altruism; conditional cooperation; self-selection

JEL-codes: D11; D12; D64; H41

37 pages, April 17, 2009

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Published as
Kjell Arne Brekke, Karen Evely Hauge, Jo Thori Lind and Karine Nyborg, (2011), 'Playing with the Good Guys: A Public Good Game with Endogenous Group Formation', Journal of Public Economics, vol 95, no 9-10, pages 1111-1118

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