A laboratory study of voluntary public goods provision with imperfect monitoring and communication

Abstract

This paper reports 17 laboratory sessions that introduce imperfect contribution monitoring in the voluntary contributions mechanism. In the imperfect monitoring treatment subjects learn others' public good contributions every six periods, and the experiment also includes face-to-face verbal communication as a treatment variable. The results demonstrate that improved contribution monitoring does not increase contributions without verbal communication, and that communication (even with imperfect monitoring) dramatically improves subjects' ability to efficiently provide the public good. The results have implications for the design of development programs that feature a prominent role for collective action.