Partner selection in public goods experiments

Mounting evidence on reciprocal behavior in various social interactions (e.g. Andreoni 1988, Fehr and Gächter 2000, Isaac and Walker 1988) suggests that the usually observed decline of cooperation in public goods experiments is mainly due to the influence of low contributors and reciprocal reaction of cooperators. Attempts to investigate this conjec-ture by regrouping individuals according to their predisposition in high and low contribut-ing subgroups proved to enhance overall efficiency in the private provision of public goods (Gunnthorsdottir et al. 2001), mainly due to enduring high cooperation by the former sub-group. The reason why social dilemmas are quite well resolved in everyday life may be due to the fact that individuals can decide to quit their membership in an uncooperative group and choose their interaction partners themselves. Examples are various like moving to a new neighborhood, recruiting co-workers or choosing new members in sports teams. Already Tiebout (1956) suggested that "voting with one’s " feet, i.e. choosing the com-munity that best satisfies one’s preferences for collective goods, can solve the problem of market failures in efficiently providing public goods. Papers by Ehrhart and Keser (1999