Abstract/Summary

We study how different types of individuals respond to being forced to make a minimum contribution to a global public good. Participants in our experiment decide how much of their endowment to contribute towards offsetting CO2 emissions. We elicit their contributions when they are free to spend any amount of their endowment on carbon offsets and when they are forced to spend a certain minimum amount on it. We find that those who contribute more than the minimum before it is imposed contribute less overall once the minimum comes into effect. This is true for both a low and a high level of the minimum and appears to be driven in part by pessimistic beliefs about the contributions of others. We show that the lower minimum also reduces overall contributions relative to a situation with no minimum. We do not find evidence that having the level of the minimum determined through a majority vote rather than an exogenous procedure has any material impact on these results.