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Universität zu Köln
Wirtschafts- und Sozialwissenschaftliche Fakultät

Staatswissenschaftliches Seminar - Prof. Schmitz

Public Goods, Property Rights, and Investment Incentives: An Experimental Investigation

David J. Kusterer and Patrick W. Schmitz

Journal of Economic Behavior and Organization, Vol. 177, 2020, 514-532.

Abstract. How should ownership rights be allocated in public-good settings? We report data from a laboratory experiment with 480 participants that was designed to test a public-good version of the property rights theory based on incomplete contracting. Consider two parties, one of whom can invest in the provision of a public good. The parties value the public good differently. In the literature it has been argued that more investments will be made if the high-valuation party is the owner, regardless of whether or not this party is the investor. Our experimental results cast some doubts on the robustness of this conclusion.

The working paper version is available for download at SSRN.

Another working paper version is available for download (CEPR Discussion Paper 13204).