Designing Feedback in Voluntary Contribution Games - The Role of Transparency
We analyze the effects of limited feedback on beliefs and contributions in
a repeated public goods game setting. In a first experiment, we test whether
exogenously determined feedback about a good example (i.e., the maximum con-
tribution in a period) in contrast to a bad example (i.e., the minimum contribution in
a period) induces higher contributions. We find that when the type of feedback is not
transparent to the group members, good examples boost cooperation while bad
examples hamper it. There is no difference when the type of feedback is transparent.
In a second experiment, feedback is endogenously chosen by a group leader. The
results show that a large majority of the group leaders count on the positive effect of
providing a good example. This is true regardless whether they choose the feedback
type to be transparent or non-transparent. Half of the group leaders make the type of
feedback transparent. With endogenously chosen feedback about good examples no
difference in contributions can be observed among transparent and non-transparent feedback selection. In both experiments feedback shapes subjects’ beliefs. With exogenously chosen feedback, transparent feedback tends to reduce beliefs when good examples are provided as feedback and tends to increase beliefs in when bad
examples are provided as feedback compared to the respective non-transparent cases. Our results shed new light on the design of feedback provision in public goods settings.