Fundraising for public goods by private contributions is often undermined by free-riding. One prominent mechanism suggested to alleviate problem of free-riding is a fixed-prize lottery with winning probabilities proportional to individual contributions (Morgan, 2000; Morgan and Sefton, 2000). Yet,...

Extensive experimental research on public goods games documents that many subjects are “conditional cooperators” in that they positively correlate their contributions with (their belief about) contributions of other subjects in their group. The goal of our study is to shed light on what...