Social Learning and Norms in a Public Goods Experiment with Inter-Generational Advice

Abstract

We adopt an inter-generational approach to the public goods game where one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private knowledge (advice left by one player in generation t is given only to her immediate successor in generation t+1), almost common knowledge (advice left by players of generation t is made available to all members of generation t+1) and common knowledge (where the advice from the preceding generation is not only made public but also read aloud by the experimenter). We find that when advice is common knowledge it generates a process of social learning and norm creation that leads to high contributions over time and also mitigates problems of free riding. Such high contributions are sustained by advice that is generally exhortative, suggesting high contributions, which in turn create optimistic beliefs, especially among conditional co-operators, about the contributions to be made by other subjects. Our results suggest that socially connected communities may be able to achieve high contributions to a public good even in the absence of any punishment opportunities of norm violators.

Keywords: Voluntary contributions mechanism, Advice, Beliefs, Conditional

JEL Classification: C92, C33, C34