CeDEx 2013-05: Cooperation in Small Groups: The Effect of Group Size (revised version of 2012-17)

Abstract

We study the effect of group size on cooperation in voluntary contribution mechanism games. As in previous experiments, we study four- and eight-person groups in high and low marginal per capita return (MPCR) conditions. We find a positive effect of group size in the low MPCR condition, as in previous experiments. However, in the high MPCR condition we observe a negative group size effect. We extend the design to investigate two- and threeperson groups in the high MPCR condition, and find that cooperation is highest of all in twoperson groups. The findings in the high MPCR condition are consistent with those from nperson prisoner’s dilemma and oligopoly experiments that suggest it is more difficult to sustain cooperation in larger groups. The findings from the low MPCR condition suggest that this effect can be overridden. In particular, when cooperation is low other factors, such as considerations of the social benefits of contributing (which increase with group size), may dominate any negative group size effect.

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Now published in Experimental Economics

Authors

Daniele Nosenzo, Simone Quercia and Martin Sefton

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