New hope for the voluntary contributions mechanism: The effects of context

This research examines how three common contextual factors can affect contributions in the linear voluntary contributions mechanism (VCM). Using business student subjects and a low marginal per capita rate of return, the results show that contributions in the last of ten rounds range from 18% for the traditional VCM with no initial cheap talk, no voting, and a status quo of not giving to 94% in a VCM with initial cheap talk, voting, and a status quo of giving. The results demonstrate that context can make the VCM produce sustained efficiencies similar to incentive-compatible public-good mechanisms.