1. FREE-RIDING and INTERGROUP MOBLITILY Jun Kobayashi (Chicago) Hideki Fujiyama (Dokkyo) Yuhsuke Koyama (Tokyo Tech) Hirokuni Ooura (Teikyo) August 16, 2004 ASA, San Francisco

2. OVERVIEW Free-riding and Mobility? Experiment w/ Exit Option Macro Dynamics and Micro Behavior

3. 3 Modern Societies... MOBILITY Turnover, Divorce, Moving, Immigration Globalization, Internet QUESTION Effects of MOBILITY on FREE-RIDING???

4. 4 RATIONAL to FREE-RIDE but EFFICIENT to COOPERATE (Externality) Promise, Donation Teamwork, Social Movement FREE-RIDER PROBLEM

5. ON the RUN (Erhart-Keser) Experiment, 9 in initial 3 groups Cooperators “ESCAPE” (Group) Circulation Cooperation↑ -> Size↑ -> C↓-> S↓ (Individual) Avoid Free-riders Cooperator↑ -> Leave S↑, Enter S↓ Various Conditions???

6. Introduction Data Result

7. 7 2003/4, 4 universities in Japan 14 Sessions, 234 students 1289.0 yens ($11), 90 minutes Computer-based, Group data NO Mobility LOW/ HIGH/ COMPLETE Mobility 16-7 in 4 Groups, Anonymous 50 Rounds ， 9 Pauses/Exit chances EXPERIMENT

8. 8

9. 9 GAME A B C D Pause/ Exit Free-rider Problem

10. 10 Resource 20 yens PROVIDE or NOT Pooled Resources... DOUBLED...3/more-player groups x 1.5... 2-player Groups SAME... 1-player Groups EQUALLY Distributed in Group 1. FREE-RIDER PROBLEM

11. 11 Provide = 40m / 4 (Providers) Not = 40(m-1) / 4 + 20 Not Provide Not x 2 = EXAMPLE (4 PLAYERS)

12. 12 NO Mobility... PAUSE LOW Mobility... 50 yens to Exit HIGH Mobility... 20 yens Complete Mobility... 0 yen 2. PAUSE or EXIT

13. A 33.33 B 25.00 C 27.50 D 25.00 A 33.33 B 25.00 C 27.50 D 25.00 A 3 B4 C8 D 2 Groups’ Average Payoffs Last Round Groups’ Average Payoffs in This Block Groups’ Size Group C Block 2 Round 2 Your Decisions and Payoffs in This Block RoundYour DecisionYour Payoff 1NOT35.00 2PROVIDE 5.00 Your Total: 125 yens ( 20 yens subtracted for Moving) Group C's Members: You (ID 6) and Other 7 What do you do this round? PROVIDE 20 yens NOT

14. Provided 20 yens: 3 persons Not: 4 persons Your Decision: Provide Your Payoff: 17.14 yens

15. Groups’ Average Payoffs Last Block, Size BLOCK END Groups’ Average Payoffs GroupRound 12345 A 33.33 20.00 15.55 24.76 35.00 B 25.00 35.00 19.10 35.00 C 27.50 22.00 27.50 20.00 D 25.00 35.00 25.00 18.88 Your payoff Last Block: 112 yens in Group C Click to Next A 30.00 3 B 33.33 4 C 25.00 8 D 27.50 2

16. A 30.00 3 B 33.33 4 C 25.00 8 D 27.50 2 Groups’ Average Payoffs Last Block, Size BLOCK END Groups’ Average Payoffs GroupRound 12345 A 33.33 20.00 15.55 24.76 35.00 B 25.00 35.00 19.10 35.00 C 27.50 22.00 27.50 20.00 D 25.00 35.00 25.00 18.88 Your payoff Last Block: 112 yens in Group C Which Group in Next Block? Move with 50 yens Group A B C D

17. Introduction Data Result

18. 18 Cooperation DECREASES Rounds Cooperation Mobility

19. y = GROUP SIZE N=360 (Groups in Blocks) Group Cooperation ↑ -> Size ↑ Model 12 BLOCK (1-10).001.002 PREVIOUS SIZE-.602*** PREVIOUS C.163**.356*** Adjusted R 2.021.347

20. y = GROUP COOPERATION Group Size ↑ -> Cooperation ↓ Model 12 BLOCK-.059-.061 PREVIOUS C.232*** PREVIOUS SIZE-.143* CURRENT SIZE-.377***-.269*** Adjusted R 2.164.127

21. LEAVE and ENTER Correlations with COOPERATION N=505 (Individual Mobility) Cooperators Leave LARGE Groups Enter SMALL Groups (to Avoid Free-riders) Group Sizer PREVIOUS Size, Left.041 PREVIOUS Size, Entered-.141**

22. 22 Mobility DECREASES Cooperation Cooperative Groups EXPAND, then DECREASE Cooperation Cooperators Enter SMALL Groups Differences b/w CONDITIONS? Role of SANCTION? SUMMARY