L10: Framing effects: Andreoni (1995)

Question 1

What does Andreoni (1995) examine?

Answer 1

The effects of positive and negative framing on co-operation in PGG

Question 2

What are the two conditions in Andreoni (1995)?

Answer 2

Positive frame

Negative frame

Question 3

Explain the positive frame in Andreoni (1995)?

Answer 3

Contributing to a public account has a positive benefit to other group members
- Every token kept yields personal gain of 1. Every token invested yields every group member 0.5 (the game begins with all tokens already placed in private account)

Question 4

Explain the negative frame in Andreoni (1995)?

Answer 4

Withdrawing from the public account makes others worse off
- Every token kept yields personal gain of 1. However, each token you keep also reduces the earnings of other players by 0.5 each (game begins with all subjects endowed with their opponents’ tokens in the public account, tf eroded if moved to private)

Question 5

What is the dominant strategy here in each treatment?

Answer 5

Incentives are identical in both treatments, self-interested subject has dominant strategy to free ride

Question 6

What did Andreoni (1995) find?

Answer 6

People are significantly more willing to cooperate in a public goods experiment when the problem is posed as a positive externality rather than as a negative externality