Voluntary contributions with imperfect information: An experimental study

This paper uses a two-person linear voluntary contribution mechanism with stochastic marginal benefits from a public good to examine the effect of imperfect information on contributions. Estimates of individual risk preferences are obtained using data from second-price auctions over lotteries. The results show that limited information about the value of the public good significantly lowers average contributions in all periods but the last. Moreover, the results support the interpretation that subjects bid “as if” they were risk averse, and suggest that “as if” risk-averse behavior is negatively correlated with willingness to contribute.