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Voting on Punishment Systems within a Heterogeneous Group

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  • CHARLES N. NOUSSAIR
  • FANGFANG TAN

Abstract

We consider a voluntary contributions game, in which players may punish others after contributions are made and observed. The productivity of contributions, as captured in the marginal-per-capita return, differs among individuals, so that there are two types: high and low productivity. Every two or eight periods, depending on the treatment, individuals vote on a punishment regime, in which certain individuals are permitted, but not required, to have punishment directed toward them. The punishment system can condition on type and contribution history. The results indicate that the most effective regime, in terms of contributions and earnings, is one that allows punishment of low contributors only, regardless of productivity. Nevertheless, only a minority of sessions converge to this system, indicating a tendency for the voting process to lead to suboptimal institutional choice.

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Bibliographic Info

Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 13 (2011)
Issue (Month): 5 (October)
Pages: 661-693

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Handle: RePEc:bla:jpbect:v:13:y:2011:i:5:p:661-693

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  1. Reuben, Ernesto & Riedl, Arno, 2007. "Public Goods Provision and Sanctioning in Priveleged Groups," Research Memorandum 028, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  2. Michael Kosfeld & Akira Okada & Arno Riedl, 2006. "Institution Formation in Public Goods Games," IEW - Working Papers 299, Institute for Empirical Research in Economics - University of Zurich.
  3. Martin Sefton & Robert S. Shupp & James Walker, 2005. "The Effect of Rewards and Sanctions in Provision of Public Goods," Working Papers 200504, Ball State University, Department of Economics, revised Feb 2005.
  4. Brandts, Jordi & Schram, Arthur, 2001. "Cooperation and noise in public goods experiments: applying the contribution function approach," Journal of Public Economics, Elsevier, vol. 79(2), pages 399-427, February.
  5. Arhan Ertan & Talbot Page & Louis Putterman, 2005. "Can Endogenously Chosen Institutions Mitigate the Free-Rider Problem and Reduce Perverse Punishment?," Working Papers 2005-13, Brown University, Department of Economics.
  6. Stephan Kroll & Todd L. Cherry & Jason F. Shogren, 2007. "Voting, Punishment, And Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 557-570, 07.
  7. Palfrey, Thomas R & Prisbrey, Jeffrey E, 1997. "Anomalous Behavior in Public Goods Experiments: How Much and Why?," American Economic Review, American Economic Association, vol. 87(5), pages 829-46, December.
  8. Matthias Cinyabuguma & Talbot Page & Louis Putterman, 2006. "Can second-order punishment deter perverse punishment?," Experimental Economics, Springer, vol. 9(3), pages 265-279, September.
  9. Masclet, D. & Noussair, C. & Tucker, S. & Villeval, M.C., 2001. "Monetary and Non-monetary Punishment in the Voluntary Contributions Mechanism," Purdue University Economics Working Papers 1141, Purdue University, Department of Economics.
  10. Ertan, Arhan & Page, Talbot & Putterman, Louis, 2009. "Who to punish? Individual decisions and majority rule in mitigating the free rider problem," European Economic Review, Elsevier, vol. 53(5), pages 495-511, July.
  11. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2005. "Driving Forces Behind Informal Sanctions," IZA Discussion Papers 1635, Institute for the Study of Labor (IZA).
  12. Denant-Boemont, L. & Masclet, D. & Noussair, C.N., 2007. "Punishment, counterpunishment, and sanction enforcement in a social dilemma experiment," Open Access publications from Tilburg University urn:nbn:nl:ui:12-284310, Tilburg University.
  13. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
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  15. Magdalena Margreiter & Matthias Sutter & Dennis Dittrich, 2005. "Individual and Collective Choice and Voting in Common Pool Resource Problem with Heterogeneous Actors," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(2), pages 241-271, October.
  16. Pedro Dal Bo & Andrew Foster & Louis Putterman, 2007. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy," Working Papers 2007-9, Brown University, Department of Economics.
  17. Haigner, Stefan & Kocher, Martin & Sutter, Matthias, 2006. "Choosing the Stick or the Carrot? Endogenous Institutional Choice in Social Dilemma Situations," CEPR Discussion Papers 5497, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Nikiforakis, Nikos & Noussair, Charles N. & Wilkening, Tom, 2012. "Normative conflict and feuds: The limits of self-enforcement," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 797-807.
  2. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
  3. Ernesto Reuben & Arno Riedl, 2009. "Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations," CESifo Working Paper Series 2725, CESifo Group Munich.
  4. Kerri Brick & Martine Visser, 2012. "Heterogeneity and Voting: A Framed Public Good Experiment," Working Papers 298, Economic Research Southern Africa.
  5. Brick, Kerri & Van der Hoven, Zoe & Visser, Martine, 2012. "Cooperation and Climate Change: Can Communication Facilitate the Provision of Public Goods in Heterogeneous Settings?," Discussion Papers dp-12-14-efd, Resources For the Future.
  6. Sebastian Prediger, 2011. "How does income inequality affect cooperation and punishment in public good settings?," MAGKS Papers on Economics 201138, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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