FSS-DECO Seminar: Believers versus Skeptics: Experimentation in Public Good Provision
Speaker: Prof. Liuchun DENG, Associate Professor of Economics, Duke Kunshan University, China
Date: 04 February 2026 (Wednesday)
Time: 14:00-15:15
Venue: E21B-G002
Language: English
Abstract: Members of a society often hold diverse beliefs about the relevance and effectiveness of public policies. How does heterogeneity in beliefs affect collective decision making under uncertainty? We develop a dynamic model where agents, with varying initial beliefs about an underlying state, engage in a public good contribution game. The state can either be policy-dependent (state D), where contributions raise the probability of a good outcome, or policy-independent (state I), where they do not. Agents update their beliefs based on observed outcomes, influencing future contributions. We focus on passive experimentation, where the probability of a good outcome in state I is high, and contributions reduce the distinction between states, providing more information when contributions are lower. We find that belief polarization can increase contributions when the marginal effect of contributions is small, as the negative signal-jamming effect (which obscures information) is mitigated by a positive attribution effect (which encourages belief updating). We also explore how these results extend to durable contributions, non-conclusive bad outcomes, and active experimentation.
