Will your contribution tip the project over the line?
When a project has a threshold, a small contribution can be pivotal. Institutions can change who expects others to contribute and how commitments are enforced.
Inside this model
Three other people each independently contribute 10 with the chosen probability. The project pays every person 40 if total pledges reach the target. Your pledge costs you its amount whether or not funding succeeds. The chart enumerates all eight possible patterns of other contributors to compute your expected net payoff for each pledge.
Out in the world
A practical use
A neighborhood improvement may be funded only after enough households make credible pledges.
A useful lens. Not a universal law.
- Independent decisions, fixed 10-unit pledges, identical 40-unit benefits, and sunk pledges are model rules. Real projects may refund failed pledges and coordinate through discussion.
Associated thinkers
Further reading
Explore the original research or the teaching reference behind this experiment.
Elinor Ostrom — Beyond Markets and States ↗