To Join or not to Join: Coalition Formation in Public Good Games

  • 研討會日期 : 2021-04-21
  • 時間 : 10:30
  • 主講人 : Ms. Sakshi Upadhyay
  • 主持人 : Professor Ritesh Jain
  • 地點 : online
  • 演講者簡介 : Ms. Upadhyay will receive her Ph.D. in Economics from Virginia Polytechnic Institute and State University in 2021. Her research field are Behavioral Economics, Applied Theory, and Experimental Economics. She is applying for a position of the Institute of Economics, Academia Sinica now.
  • 演講摘要 : In this paper I study the long standing trade-off between coalition sizes and return from public good. After incorporation of social preferences, I show that this trade off need not exist, which is in line with existing experimental evidence. My model setup is a two stage public good game where heterogeneous agents have the option to join the coalition. In the first stage, agents choose whether to join a coalition and in the second stage, coalition votes on whether its members will contribute. I find that individuals with stronger social preferences are more likely to join the coalition and vote for the coalition to contribute to the public good. I further show that higher return from public good leads to more people joining the coalition and contributing to the public good. These results hold whether the coalition’s decision is determined by a majority voting or a unanimous voting rule. In an experiment, I test the theoretical predictions of my model. The subject's payoffs are determined by exogenously inducing social preferences into an individual's utility function. The results are in support of the model's predictions.