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Punishment in a Regulatory Setting: Experimental Evidence from the VCM

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  • Anderson, Lisa R
  • Stafford, Sarah L

Abstract

To analyze the effectiveness of punishment in inducing regulatory compliance, we modify a standard public goods experiment to include a financial penalty for free riding. The design allows us to vary both punishment probability and severity. We introduce the punishment mechanism in both a one-time and a repeated treatment and find that compliance (contributing to the public good) is increasing in expected punishment cost in both treatments. We also find that punishment severity has a larger effect on behavior than punishment probability. In the repeated treatment, we find that past punishment has a negative rather than positive effect on compliance. Copyright 2003 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 24 (2003)
Issue (Month): 1 (July)
Pages: 91-110

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Handle: RePEc:kap:regeco:v:24:y:2003:i:1:p:91-110

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Web page: http://www.springerlink.com/link.asp?id=100298

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Cited by:
  1. David Bruner, 2009. "Changing the probability versus changing the reward," Experimental Economics, Springer, vol. 12(4), pages 367-385, December.
  2. Tatsuyoshi Saijo & Junyi Shen & Xiangdong Qin & Kenju Akai, 2007. "The Spite Dilemma Revisited: Comparison between Chinese and Japanese," OSIPP Discussion Paper 07E004, Osaka School of International Public Policy, Osaka University.
  3. Lisa R. Anderson & Sarah L. Stafford, 2006. "Does Crime Pay? A Classroom Demonstration of Monitoring and Enforcement," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 1016–1025, April.
  4. Murphy, James J. & Stranlund, John K., 2007. "A laboratory investigation of compliance behavior under tradable emissions rights: Implications for targeted enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 196-212, March.
  5. Camacho-Cuena, Eva & Requate, Till, 2012. "The regulation of non-point source pollution and risk preferences: An experimental approach," Ecological Economics, Elsevier, vol. 73(C), pages 179-187.
  6. Germani, Anna Rita & Morone, Andrea & Morone, Piergiuseppe & Scaramozzino, Pasquale, 2013. "Discretionary enforcement and strategic interactions between firms, regulatory agency and justice department: a theoretical and empirical investigation," MPRA Paper 51369, University Library of Munich, Germany.
  7. Murphy, James J. & Stranlund, John K., 2003. "An Experimental Analysis Of Compliance Behavior In Emissions Trading Programs: Some Preliminary Results," 2003 Annual meeting, July 27-30, Montreal, Canada 22039, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Chen, Josie I, 2014. "Obedience to Rules with Mild Sanctions: The Roles of Peer Punishment and Voting," MPRA Paper 55364, University Library of Munich, Germany.
  9. David Dickinson & E. Glenn Dutcher & Cortney Rodet, 2013. "Observed Punishment Spillover Effects: A Laboratory Investigation of Behavior in a Social Dilemma," Working Papers 1301, University of Central Missouri, Department of Economics & Finance, revised Sep 2013.
  10. Xiao, Erte & Houser, Daniel, 2009. "Avoiding the sharp tongue: Anticipated written messages promote fair economic exchange," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 393-404, June.
  11. Kamijo, Y. & Nihonsugi, T. & Takeuchi, A. & Funaki, Y., 2014. "Sustaining cooperation in social dilemmas: Comparison of centralized punishment institutions," Games and Economic Behavior, Elsevier, vol. 84(C), pages 180-195.
  12. Lisa R. Anderson & Sarah L. Stafford, 2009. "An Experimental Study of the Effect of Announcements on Public Goods Contributions," Working Papers 82, Department of Economics, College of William and Mary.
  13. Kent Messer & Jordan Suter & Jubo Yan, 2013. "Context Effects in a Negatively Framed Social Dilemma Experiment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 55(3), pages 387-405, July.
  14. David L. Dickinson & E. Glenn Dutcher & Cortney S. Rodet, 2011. "Punishment History and Spillover Effects: A Laboratory Investigation of Behavior in a Social Dilemma," Working Papers 11-02, Department of Economics, Appalachian State University.
  15. Lana Friesen & Dietrich Earnhart, 2012. "Environmental Management Responses to Punishment: Specific Deterrence and Certainty versus Severity of Punishment," Discussion Papers Series 463, School of Economics, University of Queensland, Australia.
  16. Ibanez, Marcela & Martinsson, Peter, 2008. "Can we do policy recommendations from a framed field experiment? The case of coca cultivation in Colombia," Working Papers in Economics 306, University of Gothenburg, Department of Economics.
  17. Ibanez, Marcela & Martinsson, Peter, 2013. "Curbing coca cultivation in Colombia — A framed field experiment," Journal of Public Economics, Elsevier, vol. 105(C), pages 1-10.
  18. Gregory DeAngelo & Gary Charness, 2012. "Deterrence, expected cost, uncertainty and voting: Experimental evidence," Journal of Risk and Uncertainty, Springer, vol. 44(1), pages 73-100, February.

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