Cost-effective giving with multiple public goods

In this paper, we investigate how the choice environment affects contribution behavior in settings with multiple public goods. Specifically, we design a novel experiment that uses a standard voluntary contribution mechanism (VCM) game, except that subjects face multiple simultaneous VCMs, each with a different marginal per capita return (MPCR). We study two treatments-one with constrained contribution choices and one with a richer set of options-finding that the constrained choice environment yields higher payoffs. As a virtue of our design, we are able to decompose these payoff differences into two separate channels: differences in contribution levels versus differences in the cost effectiveness of contributions. Although the first channel is typically the primary focus of public good analyses, we offer unique insights by showing that cost-effectiveness also plays an important role in shaping welfare outcomes in settings with multiple public goods. We find that costineffective contributions significantly diminish payoffs in the richer choice environment-a result with important implications for modern charity and crowdfunding platforms, where donors are faced with an ever-growing number of charitable causes to consider. (C) 2020 Elsevier B.V. All rights reserved.