The “Spite” Dilemma in Voluntary Contribution Mechanism Experiments

Abstract

This article explains deviations from formal expectations regarding choice behavior in settings where economic rationality (i.e., own payoff maximization) dictates either cooperating (full contribution) or free riding (no contribution) in the provision of public goods via the voluntary contribution mechanism. The authors find that the difference between full contribution and the observed level of contribution is greater than or equal to the corresponding difference when free riding is the best strategy. This surprising result is interpreted as the “spiteful” behavior of subjects whose first priority is not the total amount of payoff they receive but the ranking among them.