Public Goods Game:
Provision Point Mechanism (PPM)
Student Instructions
•
•
•
•
You are placed
into a group of
size 4.
Everyone starts
out with 10
tokens.
You decide how
many tokens to
send to the
group as
“Tokens Sent”
account and how
many to keep as
“My Tokens”
The highlighted
column shows
your possible
earnings based
on the decisions
of others in the
group (scroll to
see more).
Decision Screen
• To move the
tokens to the
“Tokens Sent”
box finger drag
each token to
the left until
you are
satisfied with
your decision.
• You can move
tokens back
and forth until
you lock in
your decision.
• Press and hold
the “Done”
token to lock in
your decision.
Decision Screen
• Touch the
others’ average
row to
highlight.
• The red box is
your round
earnings IF you
keep your
current
decision (8)
AND IF the
others’ group
members send
the average
expected (8).
WHAT IF? Analysis
•
•
•
A minimum of 32
group tokens are
needed to
produce the
public good.
Any amount
exceeding 32
produces a more
valuable public
good.
Any amount less
than 32 is
insufficient to
produce the
public good and
everyone’s
tokens are
returned.
Provision Point Summary
When Voluntary Provision is Successful
• The summary
stage will tell
you voluntary
provision was
successful.
• The tokens
you send will
disappear and
your equal
share of the
multiplied
total group
tokens is
added to your
“My Tokens”
When Voluntary Provision is Not Successful
• The summary
stage will tell
you voluntary
provision was a
failure.
• The tokens you
send will be
refunded to
your “My
Tokens” and
you will end up
back where
you started at
10 tokens.
• Use the
bottom table
to compare
rounds over
time.
• You can see
the number
of “Group
Failures”
including your
group
• Your group
failed that
round if your
round
earnings = 10
Earnings History Table
Discussion of the voluntary provision
rounds
• Who sent all of their tokens each round?
Why?
• Who kept all of their tokens each round?
Why?
• Who did something else?
• Did verbal communication help more?
• Is this more of a coordination problem or a
cooperation problem?
Public Goods Problem
• Private goods: excludable & rival
• Public goods: nonexcludable & nonrival
– Incentive to cheap ride – once public good is
made available cannot exclude lower-contributors
from consuming
– Conditional Cooperation – cannot expect others to
contribute, so you reduce contributions
– Combined effects result in underproduction