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Competition for Status Acquisition in Public Good Games

This paper examines the role of status acquisition as a motive for giving in voluntary contributions to public goods. In particular, every donor's status is given by the difference between his contribution and that of the other donor. Specifically, I show that contributors give more than in standard models where status is not considered, their donation is increasing in the value they assign to status and, under certain conditions, in the value that their opponents assign to status (reflecting donors' competition to gain social status). Furthermore, I consider contributors' equilibrium strategies both in simultaneous and sequential contribution mechanisms. Then, I compare total contributions in both of these mechanisms. I find that the simultaneous contribution order generates higher total contributions than the sequential mechanism only when donors are sufficiently homogeneous in the value they assign to status. Otherwise, the sequential mechanism generates the highest contributions. Copyright 2011 Oxford University Press 2011 All rights reserved, Oxford University Press.