Multiple Choice

Two groups participate in an experiment where they can contribute to a shared project over ten successive rounds. In each round, the total contributions are increased by a fixed percentage and then distributed equally among all participants, regardless of their individual contributions.

  • Group A has no mechanism to influence each other's earnings. Their average contribution starts high but steadily decreases with each round.
  • Group B is informed that a mechanism exists allowing them to penalize low contributors, but records show this mechanism is very rarely used. Despite this, Group B's average contribution remains consistently high across all ten rounds.

What is the most likely explanation for the difference in outcomes between the two groups?

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Updated 2025-09-14

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