Behavioural Economics Seminar: When and How are people confused in Public Good Games? – University of Copenhagen

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Behavioural Economics Seminar: When and How are people confused in Public Good Games?

Presenter: Karen Larsen, University of Helsinki

Abstract

Public good games have been criticized for their ability to reveal motivations for cooperation as experiments have shown that misunderstanding leads to appearance of cooperation (Burton-Chellew et al. 2015). In this research we utilize the Fosgaard, Hansen, Wegström misperception test for public good games to dive deeper into confusion in public good games and to understand when and how people are confused. We utilize a large dataset of 2741 participants from three public good experiments. 49% of the participants were confused on either (or both) the economic or the socially optimal strategy according to the misperception test. 22% were confused when asked what the socially optimal strategy was. 44% were confused about the economically optimal strategy. Are these confused participants using their own heuristics when faced with a public good game? Can we identify consistent types such as Unconditional Contributors, Conditional Contributors, Negative Contributors, Triangular Contributors and Free Riders for the confused participants? By combining the answers from Fischbacher et al. 2001’s Strategy Method (conditional contribution) and the answers to the misperception test we identify consistent types for the confused participants. We identify consistent types for 51% of the 615 socially confused participants and 68% of the 1199 economically confused participants. We analyze the three groups (not confused, confused with own heuristics, confused) against the participants characteristics in IQ test, cognitive reflection, personality and demographics.