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Non-Governmental Public Norm Enforcement in Large Societies as a Two-Stage Game of Voluntary Public Good Provision

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  • Wolfgang Buchholz

    ()

  • Josef Falkinger

    ()

  • Dirk Rübbelke

    ()

Abstract

In small groups, norm enforcement is achieved through mutual punishment and reward. In large societies, norms are enforced by specialists such as government officials. However, not every public cause is overseen by states, for instance those organized at the international level. This paper shows how non-governmental norm enforcement can emerge as a decentralized equilibrium. As a first stage, individuals voluntarily contribute to a non-governmental agency that produces an incentive system. The second stage is the provision of a public good on the basis of private contributions. The incentive system punishes and rewards deviations from the norm for contributions by means of public approval or disapproval of behavior. It is shown that, even in large populations, nongovernmental norm enforcement can be supported in a non-cooperative equilibrium of utility-maximizing individuals.

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Bibliographic Info

Paper provided by Australian National University, College of Business and Economics, School of Economics in its series ANU Working Papers in Economics and Econometrics with number 2011-566.

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Length: 27 Pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:acb:cbeeco:2011-566

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  1. Kosfeld, Michael & Okada, Akira & Riedl, Arno, 2006. "Institution Formation in Public Goods Games," IZA Discussion Papers 2288, Institute for the Study of Labor (IZA).
  2. Olof Johansson-Stenman & James Konow, 2010. "Fair Air: Distributive Justice and Environmental Economics," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 46(2), pages 147-166, June.
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