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A repeated public good financing experiment

Introducing the Free Rider Problem

Rules as explained to players:

You will play a public good financing experiment repeatedly.

Choose how much you are willing to contribute to build a given public good. The final value of the public good to you will be equal to 2 times the average contribution of all the players.

For example, if you are 5 players, that you decide to contribute about 70 and that the others give respectively 30, 50, 40 and 60, then the average contribution equals 50 and your payoff is 2*50-70=30€.

In fact, you will play two of these games at the same time, with random players from your class. The same players will remain in the same universes until the end.

Your overall payoffs are compared to those of everyone else in the class. Your goal is to maximize your payoff, not just to be better than the players you are faced with.

Game details:

Contribution Choice

Each player will take part to 2 experiments simultaneously.

Choose the number of players and the number of different universes: If there are 32 players and you choose 3 universes, the students will be randomly spread across 3 universes (two with 11 students and one with ten) for the first experiment and across 3 other universes for the second experiment.

Having several universes ensures that players really have incentives to pay more attention to payoffs and less attention to their ranking inside their experiments. Indeed, a player who is the first in an extremely competitive experiment might end up with a bad overall ranking.

Note that the coreecon textbook offers a very interesting empirical project on public goods experiments that is partly based on this game.

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