Communication, equity and the voluntary provision of a public good by heterogeneous groups

an article by Kenneth S. Chan (City University of Hong Kong and McMaster University, Hamilton, Canada), Stuart Mestelman and R. Andrew Muller (McMaster University, Hamilton, Canada) and Robert Moir (University of New Brunswick, Saint John, Canada) published in Journal of Socio-Economics Volume 41 Issue 1 (January 2012)

Abstract

Twenty-four laboratory sessions were conducted to evaluate the roles of communication and group heterogeneity when voluntary contributions determine the level of public good provision by small groups of individuals. Simple heterogeneity has one individual in a group having either greater endowment of resources or a greater preference for the public good than the others. Complex heterogeneity has one individual in a group having both higher endowment and greater preference for the public good. Without communication, members of heterogeneous groups tend to coordinate more on equal contribution shares than predicted by the conventional public goods model but consistent with a model incorporating a preference for equity. The distribution of relative contributions and total payoffs within groups exhibit strong interactions between communication and heterogeneity, leading to less equitable distributions of payoffs as heterogeneity becomes more complex. A model of equity theory helps to organize the results. Results suggest that communication may refocus the objective of group members.

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