Private information, private returns, and cooperation behavior among peri-urban households in Ethiopia: Field experiment evidence

This study investigates cooperative behavior among peri-urban farmers in Ethiopia using survey data and behavioral experiments in a two-round public goods game framework. The experiment involved a random sample of 500 participants across four distinct arms, each exploring different facets of cooperative behavior. First, participants were given the option to invest in a common account with resources doubled and equally distributed, and in a variation where private returns were allowed. In the second round, participants were further divided into two groups – one group received information about the contribution rates of the first round, while the other group received no information. Our hypotheses focused on the impact of private returns and information on cooperation. Results indicate that average contribution rates were lower with private returns and information, suggesting potential moral erosion with market interactions. However, non-parametric tests show no significant decrease in contributions under private returns only but significant effects from information provision on cooperative behavior. Regression analysis identifies previous cooperation rates, information on contribution rate and average contribution rate of the group, and age as significant factors influencing cooperation. This study enhances our understanding of cooperative behavior dynamics in peri-urban farmers’ settings in a developing country, informing strategies for sustainable resource management and agricultural development initiatives.