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Offerman, T. and van der Veen, A. (2015). How to subsidize contributions to public goods: Does the frog jump out of the boiling water? European Economic Review, 74:96-108.


  • Journal
    European Economic Review

According to popular belief, frogs are boiled to death when the water is heated gradually. In this paper, we investigate how humans respond to a very slow versus a very steep increase of a subsidy on contributions to a public good. In an experiment, we vary the mode of the increase (gradual versus quick). When the subsidy is raised to an intermediate level, we see a modest effect in either treatment. When the subsidy is raised to a substantial level, there is a strong effect of a quick increase and a modest effect of a gradual increase in the subsidy.