Making and breaking promises: On the voluntary provision of public goods under cost uncertainty

Breaking promises might be easier if one faces unexpectedly high costs for keeping them. Inspired by the ‘pledge and review’ mechanisms of the Paris Agreement, we investigate the role of cost uncertainty for both initial non-binding pledges and the subsequent voluntary provision of public goods. Without a pledge review process, we find that cost uncertainty not only leads to rather conservative pledges, but can also affect later contribution decisions. A review process increases pledges, but does not necessarily improve later cooperation levels. When costs are uncertain at the pledge making stage, we find that the reviewing process benefits contribution levels only in homogeneous groups, but not for the realistic case where high and low cost players interact. Grades given in the review stage are primarily based on the contribution level, i.e. the benefits accruing to evaluators, and do not tend to take the contribution costs into account. We thus provide a skeptical assessment on the merits of peer review mechanisms for sustaining voluntary cooperation.