We investigate how preference heterogeneity affects contribution behavior in a public goods game. We measure individual preferences using the ring measure of social value orientation which enables us to classify people as altruistic, cooperative, individualistic, competitive, and aggressive. In our study, subjects are classified into individualists who maximize own outcomes or cooperators who act in the best interest of both themselves and the others. We clarify the difference in contribution behavior between both types of subjects in a simple experimental design. We use a two-person public goods game with a perfect stranger matching schemes in which subjects meet the partner only once. Moreover, we elicit subjects'beliefs about the partner's contribution for further understanding of contribution behavior.
We find that the average contribution (belief) over all 19 periods of cooperators is significantly higher than that of individualists, but the difference between average contribution (belief) of cooperators and that of individualists in each period decline over time. We also show that both types of subjects are conditional cooperators whose contributions are significantly positively correlated with beliefs which are adaptively formed on the basis of the lagged amount of contribution of the partner. However, cooperators contribute more to the public goods than individualists if the levels of belief are equal.
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