Abstract

Public goods are characterized by the nonexcludability: those who do not contribute can still consume the good. This characteristic can create problems for the creation and maintenance of public goods. However, under some conditions, when the group members know that they will be making numerous decisions together, public good provision is likely. We consider the effects of discount parameters or expectations of future interaction, and trigger strategies that involve group punishment. The experimental tests demonstrate the importance of both factors on the first decision period. After group interaction, the effect of the discount parameter diminishes. However, when long punishment periods are mandated, cooperation started at high levels and remained relatively high.

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