This module assumes that students have not been introduced to the concept of public goods and the free-riding prediction. We estimate that with all the steps the module should take between 20 and 25 minutes. This module has the following learning objectives:
In each of five rounds, each student in a 4-player groups receives $20 and makes a simultaneous decision about how much of it to contribute to a public good (a water purification project). The rate of return on the project is 40%, meaning each student receives a $0.40 benefit for each dollar contributed. This is a great environment to study the distinction between individual incentives and collective interests: the individual receives less than $1 in benefit from contributing $1, but the group's benefit is greater than $1.
The likely outcome is a moderate level of initial contributions (on the order of 40% to 60%) that decays with each passing round.
Contributions Across Rounds (Click to expand)