Social Choice and Welfare

, Volume 44, Issue 1, pp 109–132

Community projects: an experimental analysis of a fair implementation process

  • Simona Cicognani
  • Anna D’Ambrosio
  • Werner Güth
  • Simone Pfuderer
  • Matteo Ploner
Article
  • 165 Downloads

Abstract

We define and experimentally test a public provision mechanism that meets three basic ethical requirements and allows community members to influence, via monetary bids, which of several projects is implemented. For each project, participants are assigned personal values, which can be positive or negative. We provide either public or private information about personal values. This produces two distinct public provision games, which are experimentally implemented and analyzed for various projects. In spite of the complex experimental task, participants do not rely on bidding their own personal values as an obvious simple heuristic whose general acceptance would result in fair and efficient outcomes. Rather, they rely on strategic underbidding. Although underbidding is affected by projects’ characteristics, the provision mechanism mostly leads to the implementation of the most efficient project.

JEL Classification

C91 C72 D63 

Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  • Simona Cicognani
    • 1
  • Anna D’Ambrosio
    • 1
  • Werner Güth
    • 2
  • Simone Pfuderer
    • 1
  • Matteo Ploner
    • 3
  1. 1.School of Social SciencesUniversity of TrentoTrentoItaly
  2. 2.Max Planck Institute of EconomicsJenaGermany
  3. 3.Cognitive and Experimental Economics LaboratoryUniversity of TrentoTrentoItaly

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