Public Goods Experiment Teaching Module
Summary: In this experiment, students must decide how to divide their "endowment" of a good between private consumption and a public good. The private consumption provides a benefit (earnings) to only the individual and the public good provides a benefit to each person in the group, even those who do not contribute to the public good. Two versions of this hand-run experiment are provided: one to use in small classes (ranging from 5 to 40 students) and one that will work well in larger classes. Some variations on these basic experiments are also described.
Time Required: This experiment can be conducted in one 50-minute class. The experiment takes up to 20 minutes, including reading instructions. The lecture material provides up to 30 minutes of lecture.
We offer two non-computerized experiments in this section: one designed for smaller classes and the other for larger classes.
Small Class Experiment
This experiment is largely based upon "Classroom Games: Voluntary Provision of a Public Good" by Charles A. Holt and Susan K. Laury, Journal of Economic Perspectives 11(4), Fall 1997, pages 209-215.
Large Class Experiment
There are a number of variations on this experiment that you can try in class; you may come up with others that are not on this list (and your students may suggest some of their own). You should feel free to substitute any of these for the treatments suggested in the instructions, or conduct additional rounds of the experiment with any of these that you would like to try.
Once students have participated in the experiment, you should get them involved in the class discussion as much as possible. Participating in the experiment will have given them an opportunity to really think about the public goods problem (though this term has not yet been introduced) and therefore the role of the discussion period should be to help them summarize what they have learned and put it into economic terms.