Glossary
Public goods game
What is a public goods game?
A public goods game studies cooperation through contributions to a shared benefit. In a common linear version, each participant keeps part of an endowment and contributes the rest to a pool that generates benefits for the group.
Incentives
When each contributed unit returns less than one unit to its contributor but more than one unit across the group, personal monetary gain favors keeping it while total group earnings favor contribution. The prediction of zero contribution assumes the specified game and preferences for one’s own payoff.
Worked example
With four players and a pool multiplier of two, a $10 contribution returns $5 to each player, including the contributor. Keeping that $10 instead gives the contributor $10 while providing no additional pool return.
Research and limits
Fehr and Gächter’s experiment found higher contributions when costly punishment was available than when it was absent. The effects of punishment depend on game design and participants.
Why public goods games matter
The game makes a conflict visible: an action can increase the group's total return while costing the person who takes it. It lets researchers vary incentives and observe contributions.