The Impact of Redistribution Mechanisms in the Vote with the Wallet Game: Experimental Results

Becchetti LeonardoPelligra VittorioSalustri Francesco
CEIS Research Paper
We use the Vote-with-the-Wallet game (VWG) to model socially or environmentally responsible consumption, an increasingly relevant but still under-researched phenomenon. Based on a theoretical model outlining game equilibria and the parametric interval of the related multiplayer prisoners’ dilemma (PD) we evaluate with a controlled lab experiment players’ behavior in the game and test the effects of an ex post redistribution mechanism between defectors and cooperators. Our findings document that the redistribution mechanism interrupts cooperation decay and stabilizes the share of cooperators at a level significantly higher, even though inferior to the Nash equilibrium.
Number: 354
Keywords: vote with the wallet, prisoner’s dilemma, lab experiment
JEL codes: C72,C73,C91,M14
Volume: 13
Issue: 8
Date: Friday, October 2, 2015
Revision Date: Friday, October 2, 2015