One Step at a Time: Does Gradualism Build Cooperation in Public Good Provision?

Substantial literature in public economics examines coordination in public goods games. We conduct an experiment to explore how varying patterns of thresholds affect the willingness of subjects to contribute to a public good. We exploit experimental variation in threshold patterns (decreasing, constant and increasing) across time to show that for nearly every threshold, it is more profitable to be in an increasing than in a decreasing threshold group type. Each period is identical, except for the possibility of having a different threshold, which is always stated before the players make their contributions. We find that while contributions are similar for the increasing and decreasing threshold group types when thresholds were low, a sizeable gap opens up around the average threshold size. Our findings shed light on the role of past cooperative success and threshold patterns on subsequent willingness to cooperate.