Abstract
This paper examines how to maximize contribution in public good dilemmas by arranging people into homogeneous or heterogeneous subgroups. Past studies on the effect of homogeneity of efficacy have exclusively manipulated group composition in their experimental designs, which might have imposed a limit on ecological validity because group membership may not be easily changed in reality. In this study, we maintained the same group composition but varied the subgroup composition. We developed a public good dilemmas paradigm in which participants were assigned to one of the four conditions (high- vs. low-efficacy; homogeneous vs. heterogeneous subgroup) to produce their endowments and then to decide how much to contribute. We found that individuals in homogeneous and heterogeneous subgroups produced a similar amount and proportion of contribution, which was due to the two mediating effects that counteracted each other, namely (a) perceived efficacy relative to subgroup and (b) expectation of contribution of other subgroup members. This paper demonstrates both the pros and cons of arranging people into homogeneous and heterogeneous subgroups of efficacy.