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The impact of redistribution mechanisms in the vote with the wallet game: experimental results

Social Choice and Welfare volume 51, pages 595–619 (2018)Cite this article

Abstract

We use the vote-with-the-wallet game to model socially or environmentally responsible consumption, an increasingly relevant but still under-researched phenomenon. Based on a theoretical model outlining game equilibria and the parametric interval of the related multiplayer prisoners’ dilemma we evaluate with a controlled lab experiment players’ behaviour in the game and test the effects of an ex post redistribution mechanism between defectors and cooperators. Our findings document that the redistribution mechanism interrupts cooperation decay and stabilizes the share of cooperators at a level significantly higher, even though inferior to the Nash equilibrium.

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Notes

  1. The Boston Consulting Group (2014), “When Social Responsibility Leads to Growth: An Imperative for Consumer Companies to Go Green”. Downloadable at http://us5.campaign-archive2.com/?u=a102a1f840f67f04e25a7fc97&id=b8f2d07db0.

  2. Fehr and Gächter (2000) document that their decentralized punishment mechanism has a large impact on cooperation in a public good game. Several contributions extend their work in various directions focusing on nonpecuniary sanctions (Masclet et al. 2003; Noussair and Tucker 2005), effectiveness of punishment (Nikiforakis and Normann 2008) and the price of punishment (Anderson and Putterman 2006; Carpenter 2007).

  3. The case for a EU VAT reform in this direction is strongly supported by Albrecht (2006). Along this line Marconi (2010) shows that in a two-country general equilibrium model with endogenous growth and trade a unilateral green consumption tax changes demand patterns and increases technological progress in direction of pollution abatement in both countries. A more specific application of a green consumption tax is proposed by Säll and Gren (2012) who calculate that the introduction of the latter on meat could decrease emissions of greenhouse gas, nitrogen, phosphorus and ammonia by a significant amount.

  4. Eurosif (2014), “European SRI Study 2014”. Downloadable at http://www.eurosif.org/our-work/research/sri/european-sri-study-2014/.

  5. For the literature on the economic impact of fair-trade see, among others, LeClair (2002), Becchetti et al. (2014), Maseland and Vaal (2002), Moore (2004), Hayes (2006), and Redfern and Snedker (2002).

  6. Fair-trade annual impact report 2013–14.

  7. Wason (2005, October 7th), “Nestle introduces fairtrade coffee, eco-friendly product goes mainstream”, Mongabay.com. Downloadable at http://news.mongabay.com/2005/1007-reuters.html.

  8. Gunther (2010, October 25th), “Ben & Jerry announces big move into fair trade”, Mother Nature Network. Downloadable at http://www.mnn.com/earth-matters/wilderness-resources/blogs/ben-jerry-announces-big-move-into-fair-trade.

  9. Mars (2011, September), “Mars and Fairtrade International announce collaboration”. Downloadable at http://www.mars.com/global/press-center/press-list/news-releases.aspx?SiteId=94&Id=3182.

  10. Nieburg (2014, March 20th), “Ferrero makes Fairtrade cocoa commitment after rule change”, Confectionery news. Downloadable at http://www.confectionerynews.com/Commodities/Ferrero-makes-Fairtrade-cocoa-commitment-after-rule-change.

  11. Said in other terms this implies that only players without income constraints (income at least equal or above the full cost of the responsible product) can participate to the game.

  12. For a specific description of the two frames see “ESM Appendix 1”.

  13. Players’ endowment do not make any difference between the two choices and are omitted for simplicity.

  14. For further details on the socio-demographic variables and their impact see questions 1–11 of the Questionnaire in “ESM Appendix 2” and detailed descriptive and econometric findings in “ESM Appendix 2”.

  15. Similar results can be shown when marginal effects are computed at the means of our regressors and are available upon request.

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Acknowledgements

The study was funded by SmartLab (http://www.smartlabkaralis.com). We thank Andrea Attar, Marco Battaglini, Francesco Bogliacino, Mark Brockway, Giacomo Corneo, Maurizio Fiaschetti, Werner Güth, Luca Lambertini, Victor Murinde, Christine Oughton, Arsen Palestini, and François Salanie for their helpful suggestions and all the participants to the 2015 seminar held at the University of Berlin, the 2015 Luiss lab seminar in Rome, the 2016 Villa Mondragone Economic Conference, the 2016 RES-PhD Meeting in London, the 2017 DeFiMS seminar at SOAS University of London, and the 2017 IEA World Congress in Mexico City for the useful comments and suggestions received. We are also grateful to Alejandra Vasquez, Tiziana Medda, and Antonio Fadda for their invaluable research assistance provided throughout this project.

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Authors and Affiliations

  1. Department of Economics and Finance, University of Rome Tor Vergata, Via Columbia, 2, 00133, Rome, Italy

    Leonardo Becchetti & Francesco Salustri

  2. Department of Economics and Business, University of Cagliari, v.le S. Ignazio, 17, 09123, Cagliari, Italy

    Vittorio Pelligra

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  1. Leonardo Becchetti
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  2. Vittorio Pelligra
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  3. Francesco Salustri
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Correspondence to Leonardo Becchetti.

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Becchetti, L., Pelligra, V. & Salustri, F. The impact of redistribution mechanisms in the vote with the wallet game: experimental results. Soc Choice Welf 51, 595–619 (2018). https://doi.org/10.1007/s00355-018-1130-8

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  • DOI: https://doi.org/10.1007/s00355-018-1130-8