Strategic behavior in repeated voluntary contribution experiments

We conduct a repeated VCM (voluntary contribution mechanism) experiment using the strategy method and compare contribution behavior in a partner and a stranger matching in both a cold and a hot setting, where the latter differs from the former by allowing participants to revise their strategies in each round. Irrespective of whether the setting is hot or cold we find that partners provide higher initial contributions than strangers. In the cold setting (without revision possibility) partners contribute more on average but do not react differently to past contributions by others than strangers. In the hot setting the dynamic contribution plans of strangers are somewhat upward-shifted. Furthermore the contributions of partners decrease more strongly than those of strangers over time in a hot setting. The reason for this effect lies in the fact that partners react much more strongly to negative experiences than strangers. Our design and results contribute to explaining the mixed evidence in the literature on partner versus stranger comparisons.and allow us to understand under which conditions commitment can be conducive or harmful to achieving and sustaining higher levels of contribution. (C) 2010 Elsevier B.V. All rights reserved.