A shared sense of responsibility: Money versus effort contributions in the voluntary provision of public goods

Abstract

A frequently cited argument against the use of market-based instruments to provide public goods is that they diminish our sense of responsibility to be good citizens. We report on a laboratory experiment exploring whether the choice of some to contribute money in lieu effort affects the voluntary contributions of those who continue to provide effort. Subjects complete lab tasks as a contribution to a public good – carbon emission reductions. These effort contributions decrease as peers accept an offer to contribute money instead of effort. However, the aggregate result masks significant heterogeneity. Those who choose not to buy out despite its expected profitability have no response to the treatment, while those for whom it would not be profitable to buy out register large reductions in effort contributions. The magnitude of these responses increases in the share of the group accepting the buyout, suggesting that is the act of peers buying out – rather than the introduction of monetary incentives – that drives the effect.