The public goods game is a standard of experimental economics. In the basic game, subjects secretly choose how many of their private tokens to put into a public pot. The payoff of each player is their "private consumption" (their endowment minus their contribution) plus their benefit from the "public good" (the sum of contributions multiplied by a factor). The game is used to study degree of altruism and cooperation between individuals.

Public goods games are fundamental in experimental economics. The nature of the experiment is incentives and the problem of free riding. Public goods games investigate the incentives of individuals who free-ride off individuals who are contributing to the common pool.

A public goods game investigates behavioural economics and the actions of the players in the game. In this process, it seeks to use behavioural economics to understand the decisions of its players. It extends further to free-riding, which has far-reaching applications to environmental, managerial and social economics. Public goods games are valuable in understanding the role of incentives in an individual's behaviours. They arise from behavioural economics and have broad applications to societal challenges.

Examples of applications include environmental policy, legal and justice issues and workplace and organisational structures.

"Repeat-play" public goods games involve the same group of subjects playing the basic game over a series of rounds. The typical result is a declining proportion of public contribution, from the simple game (the "One-shot" public goods game). When trusting contributors see that not everyone is giving up as much as they do they tend to reduce the amount they share in the next round. If this is again repeated the same thing happens but from a lower base, so that the amount contributed to the pot is reduced again.

However, the amount contributed to the pool rarely drops to zero when rounds of the game are iterated, because there tends to remain a hard core of "givers". This effect is called the end-game effect.

One explanation for the dropping level of contribution is inequity aversion. During repeated games, players learn their co-players inequality aversion in previous rounds on which future beliefs can be based. If players receive a bigger share for a smaller contribution the sharing members react against the perceived injustice (even though the identity of the "free riders" are unknown, and it's only a game). Those who contribute nothing in one round, rarely contribute something in later rounds, even after discovering that others are.