Effect of an audience in public goods provision

Abstract This paper investigates a novel public goods game where contributions to the public goods require effort that is observable. When the players are observed, they exert more effort to contribute to the public goods, and free-riding diminishes significantly compared to the no observer case. These effects are absent when no effort is required in order to contribute to the public goods. Furthermore, in the presence of an audience, the contributions to the public goods do not diminish when the game is repeated in the effort-required environment. Being observed does not affect the performance of the players if there is no strategic aspect of the game, in other words, when they play a private goods game. These results indicate that an individual wants to avoid appearing lazy when her effort helps the society.