Public Goods Dilemma

A SocialDilemma? where yielding to the rational-but-naive temptation to free-load rather than contribute to a public good leads to nobody contributing and thus nobody benefiting from the public good.

From http://www.univie.ac.at/virtuallabs/PublicGoods/ :

: In a typical setup in experimental economics an experimenter endows e.g. six players with $10 each. The players are then offered to invest their money into a common pool knowing that the experimeter will triple the amount in the pool and distribute it equally among all participants irrespective of their contributions. If all players cooperate and contribute their $10, they will end up with $30 each. However, each player faces the temptation to defect and to free-ride on the other player's contributions since each invested dollar yields only a return of 50 cents to the investor. Therefore the 'rational' and dominating solution is to defect and invest nothing. Consequentially, groups of rational players will forego the public good and are thus unable to increase their initial endowment. This results in a deadlock of mutual defection and economic stalemate.

See http://www.google.com/search?hl=en&lr=&ie=UTF-8&oe=UTF-8&q=public+goods+dilemma.

For paradigmatic, see ZeroHourWeek

CategoryPsychology