Economics and social psychology on public goods: experiments and explorations

Abstract

Economics and social psychology come from different traditions in social science, and in the past they seldom met. Their territories seemed to be well delimited. The former discipline’s mainstream focused on market mediated interactions, making sense of an asocial concept of action by referring it to “the ordinary business of life” (Marshall, 1920, I.II.1) where agent’s choices supposedly are independent from those of other parties in the transactions (Sugden, 2002); on the other hand, the second discipline descends from the more romantic view of man as a social being, and was stimulated by questions on why and how the immersion of individuals in the multitude, or the simple presence of others, appeared to transform behaviour. Lately, however, economics has started moving in a direction that reduces this gap. In a double but interrelated move, economics is adopting experimental methods familiar to those of social psychology, and is becoming more concerned with the relevance of rational choice in contexts where there is clear inter-individual dependence, raising questions to which social psychologists have already devoted considerable time and effort. As a part of this movement, social dilemmas, that is, “situations in which (a) individual group members can obtain higher outcomes (at least under some circumstances) if they pursue their individual interest while (b) the group obtains higher incomes if all group members further the group interest” (Dijk and Wilke, 1998: 110) have become the focus of shared interest of both economists and social psychologists. The motivation for the study of social dilemmas does not differ much in economics and social psychology and it arises out of two major types of challenges. The first (Fontaine, 2002) is related to the growing consciousness of the pervasiveness of market failures (combined with government failures) concerning issues of major social urgency like pollution and the use of scarce resources. The second, (Dawes, 1991) cropped up out of the finding that people both in real-life and experimental contexts fail to behave systematically in the way depicted by standard game theory, often opting for more benign strategies. Interest in social dilemmas is thus related, on the one hand, with the concern with problems that the market cannot solve, and, on the other, with understanding the reasons that may drive people to act in ways that are not in line with rational self-interest. For economics those questions are arcane questions 1 that were never ignored by the best minds in this discipline. Marshall’s sentence in epigraph is a clear instance of this concern. This essay does not intend to cover the whole scope of existing approaches to social dilemmas since it only deals with dilemma situations that somehow fit into the economist’s category of public good provision problems and with the experimental studies in economics and social psychology2. On the basis of an exploratory joint survey of experimental literature from both disciplines, it focuses on their differences in theoretical framing and their use of the experimental method. The following points will be argued: (a) Twenty five years of experimental research in both disciplines have produced an impressive accumulation of coherent results showing that in spite of the free-riding prediction, there is a tendency to voluntary contribution in “small” groups; (b) Notwithstanding the abundance of experimental studies, several interesting problems remain unexplored. In economics, the research focus has been on “are the game theoretical predictions corroborated by experimental evidence?”, whereas in social psychology it has been on “what may cause the voluntary disposition to contribute”. Questions pertaining to “what institutional contexts might hinder or foster voluntary contribution” still offer a vast domain of unexplored possibilities. (c) In spite of all efforts, the conceptual framework that may account for the contributive disposition in public good dilemma situations and help “discover how this latent social asset can be developed” remains rather sketchy.