Abstract
This paper extends the research on incentive compatible institutions
for the provision of public goods by imposing a minimum contribution that
must be met in order for an individual to enjoy the benefits of the public
good. Excluding individuals who do not contribute at least the minimum
transforms the linear n-player pure public goods game to an n-player coordination
game with multiple, Pareto-ranked Nash equilibria. The experimental results
show that exclusion increases contributions to the public good in most
cases. However, an increase in contributions may not be sufficient to increase
social welfare because there is a welfare cost to excluding individuals
when the good is non-rival. Furthermore, exclusion can decrease both
contributions and welfare in environments in which individuals fail to
coordinate their contributions. The results are sensitive to the minimum
contribution requirement and to the relative returns from the public and
private alternatives.