Behavioral Game Theory

The basic idea behind a linear public good game is as follows: You have a group of people, typically four in the lab, who are endowed with a certain of money, say $5. Each group member is independently asked how much they want to contribute towards a public good. Any dollar that is contributed results in everyone in the group getting a return of, say, $0.40.           From an individual's perspective contributing towards the group looks like a bad deal because you contribute $1 and only get back $0.40. Note, however, that from the group's perspective a contribution of $1 results in a total return of 4 x 0.4 = $1.60. So, from the group's perspective it is good to contribute. For instance, if all four group members contribute $5 then each gets 4 x 5 x 0.4 = $8. And $8 is better than $5.            'Standard economic theory' gives a very simple prediction in a linear public good game. Namely, the game has a unique Nash equilibrium in which everyone should contri