Power asymmetry in repeated play of provision and appropriation games

Abstract

This paper studies the effect of power asymmetry on resolution of social dilemmas in repeated play of linear public good games. The experiment uses a 2 × 2 design that crosses power symmetry or asymmetry in payoff-equivalent provision and appropriation games with positive (provision) or negative (appropriation) externalities. Power asymmetry combines privileged access to information with extended opportunity sets that allow for taking a public good provided or not-appropriated by others. Our data suggest that power asymmetry has a detrimental effect on efficiency, with the effect being more pronounced in the asymmetric-power appropriation game. Individual allocations to the public good increase in others’ allocations, suggesting that individual allocations are not strategic substitutes. With power asymmetry, first movers earn less than the second mover in the appropriation game but not in the provision game.