Public Goods Game
• Is like an n-player prisoner’s dilemma game
• People have “tokens”
• They can contribute it to the common pool, or
they can keep them
• Each token kept brings the person a payoff of
1.
• Each token put in the common pool increases
everyone’s payoff (including the contributor’s)
by 0<beta<1.
• With n players, if n*beta>1, then socially, it is
best for everyone to contribute everything to
the common pool.
• But, game theory with selfish preferences
predicts that everybody will keep everything,
and contributions will be zero.
Typical Results in Experiments
In games that are played for multiple rounds
with feedback after every period:
• People start by cooperating
• Cooperation rates usually fall to almost zero
in/around the last period
Put Another Way…
Public Good Game with Punishment
100
90
Cooperation rate
80
70
60
without punishment
opportunity
with punishment
opportunity
50
40
30
20
10
0
1
2
3
4
5
6
7
8
9
10
11
Period
12
13
14
15
16
17
18
19
20
Hermann et al. (Science, 2008)