To what extent are Hungarian farmers willing to cooperate on agri-environmental schemes? : experimental evidence from a public goods game

Abstract: European Union agri-environmental measures fail to deliver expected benefits despite playing a central role in mitigating the negative effects of agriculture on biodiversity and the environment. Implementing agri-environmental contracts following a landscape-scale rather than an individual�farm level approach could potentially contribute to improving their environmental performance. We conducted a public goods game experiment with 406 Hungarian farmers to investigate their willingness to cooperate as a pre-requisite for the successful implementation of novel agri�environmental contracts. Participants were divided into treatments to analyze how variations in three characteristics of collective contract design (namely group size, threshold, and endowment) can impact farmers’ attitudes towards collaboration. The results show that unequal endowments have a large statistically significant negative effect on farmers’ average contributions. Variations in group size and threshold levels have a statistically insignificant effect on contribution levels. We conclude that Hungarian farmers’ propensity to cooperate is higher than expected considering their past experiences with collectivization and that strong economic heterogeneity can significantly impede their collaboration levels.