Volunteer's Dilemma: Cost-Sharing Revisited

Abstract

We revisit the sociological dilemma of volunteering, namely that in the production of a collective good (e.g., rescuing the victim of a public crime) a dilemma is often posed to bystanders given the chance of free-riding as to who should be the volunteer to contribute, which usually results in a failure of production and thus social inefficiency. Past theory literature suggests that when the bystander group becomes larger both the individual’s incentive of volunteering and the collective probability of the good’s production should decrease. But the latter claim goes against intuition and is less grounded in view of the experiment results. We propose a cost-sharing model that allows individual’s volunteering cost to decrease exponentially in the number of volunteers showing up, and show that the overall probability of production may increase in the number of players for sufficiently low volunteering cost, thus giving an alternative account of the reality and an explanation of the experiment results, that is, a larger group does erode individual’s incentive to volunteer but with more bystanders it eventually favors the production of the collective good. Our result also implies that the dilemma is sensitive to the way in which the volunteering cost is modeled, which thus needs to be handled with caution.

Jingwen Tian
Jingwen Tian
PhD candidate in Economics

I am a doctoral candidate in Economics at the University of Iowa. My major research interests lie in the field of industrial organization, such as R&D, patent licensing, network effects, etc.