Abstract
In an experimental study, we compare individual willingness to cooperate in a public good game after an initial team contest phase. While players in the treatment setup make a conscious decision on how much to invest in the contest, this decision is exogenously imposed on players in the control setup. As such, both groups of players incur sunk costs and enter the public good game with different wealth levels. Our results indicate that the way these sunk costs have been accrued matters especially for groups on the losing side of the contest: Given the same level of sunk costs, contributions to the public good are lower for groups which failed to be successful in the preceding between-group contest. Furthermore, this detrimental effect is more pronounced for individuals who play a contest with deliberate contributions before.
| Original language | English |
|---|---|
| Article number | 41 |
| Journal | Games |
| Volume | 9 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - Sept 2018 |
| Externally published | Yes |
Bibliographical note
Funding Information:Funding: Financial support from the Gesellschaft für experimentelle Wirtschaftsforschung e.V. (GfeW) through the “Heinz Sauermann-Förderpreis zur experimentellen Wirtschaftsforschung” grant is gratefully acknowledged.
Publisher Copyright:
© 2018 by the authors. Licensee MDPI, Basel, Switzerland.
Keywords
- Contest
- Experiment
- Public good
- Sunk costs
