Public good production in heterogeneous groups: An experimental analysis on the relation between external return and information.

In this article, we experimentally study voluntary contributions of heterogeneous groups to a public good. Members of the same group have either low or high external marginal returns. We vary the level of information about heterogeneity and a contributor’s type between groups. Controlling for the net costs of contributions, we find that the level of information determines how types in heterogeneous groups vary in their contributions. When the type of a contributor can be identified, types with high returns contribute more, otherwise the effect disappears or even reverses, with low types contributing more than high types. This result provides evidence for the so-called “poisoning-of-the-well” effect, demonstrating how this effect interacts with the information structure of the environment. Without any information about heterogeneity, there is no difference in contributions by types.