Framing Effects in Public Goods: Prospect Theory and Experimental Evidence

Iturbe Ormaetxe, Iñigo and Ponti, Giovanni and Tomás, Josefa and Ubeda, Luis (2008) Framing Effects in Public Goods: Prospect Theory and Experimental Evidence. [Working Paper]. p. 41. Working Papers. Serie AD (No. 2008-15).

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Abstract/Index

This paper studies, both theoretically and experimentally, frame effects in the context of a public good game in which players have to make a costly contribution either i) to achieve or ii) not to lose a non excludable monetary prize. Our protocol leads to public good provision (not deterioration) only if a certain contribution level is achieved. Since both frames differ with respect to the reference point, we use Prospect Theory to derive testable predictions. In particular, Prospect Theory predicts more contribution in the second frame. Our evidence suggests that a) subjects¿ behavior is highly sensitive to frames and b) the theoretical prediction is confirmed except when the threshold is low. We also estimate the parameters which better suit our experimental evidence, partly confirming previous results in the literature.


Item Type:Report / Paper (Working Paper)
Research documents and activity classification:Working Papers > Refereed Working Papers / of international relevance
Divisions:Department of Business and Management
Additional Information:The paper is the preliminary version of: "Framing Effects in Public Goods: Prospect Theory and Experimental Evidence" (I. Iturbe, G. Ponti, J. Tomas and L. Ubeda), Games and Economic Behavior, Online First, available online from 14 October 2010.
Uncontrolled Keywords:Public Goods Provision; Framing; Prospect Theory.
MIUR Scientific Area:Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited By:Maria Teresa Nistico
Deposited On:14 Dec 2010 15:40
Last Modified:23 Apr 2013 14:18

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