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Noncooperative Support of Public Norm Enforcement in Large Societies

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Author Info
Josef Falkinger ()

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Abstract

In small groups norm enforcement is provided by mutual punishment and reward. In large societies we have enforcement institutions. This paper shows how such institutions can emerge as a decentralized equilibrium. In a first stage, individuals invest in a public enforcement technology. This technology generates a sanctioning system whose effectiveness depends on the aggregate amount of invested resources. In a second stage, in which individuals contribute to the provision of a public good, the sanctioning system imposes penalties and rewards on deviations from the endogenous norm contribution. It is shown that even if group size goes to infinity public norm enforcement is supported in a noncooperative equilibrium. Psychological factors are not necessary but can be favorable for the emergence of effective public norm enforcement.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1368.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1368

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Related research
Keywords: norm enforcement; public goods; institutions; sanctioning;

Other versions of this item:

Find related papers by JEL classification:
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Boadway, Robin & Pestieau, Pierre & Wildasin, David, 1989. "Tax-transfer policies and the voluntary provision of public goods," Journal of Public Economics, Elsevier, vol. 39(2), pages 157-176, July. [Downloadable!] (restricted)
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  2. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-88, September. [Downloadable!] (restricted)
  3. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February. [Downloadable!] (restricted)
  4. Andreoni, James & Bergstrom, Ted, 1996. " Do Government Subsidies Increase the Private Supply of Public Goods?," Public Choice, Springer, vol. 88(3-4), pages 295-308, September.
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  5. Michael Kosfeld & Arno Riedl, 2004. "The Design of (De)centralized Punishment Institutions for Sustaining Co-operation," Tinbergen Institute Discussion Papers 04-025/1, Tinbergen Institute. [Downloadable!]
  6. Ernst Fehr & Simon Gachter, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September. [Downloadable!] (restricted)
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  7. Josef Falkinger & Johann K. Brunner, 1999. "Taxation in an economy with private provision of public goods," Review of Economic Design, Springer, vol. 4(4), pages 357-379. [Downloadable!] (restricted)
  8. Roberts, Russell D, 1992. " Government Subsidies to Private Spending on Public Goods," Public Choice, Springer, vol. 74(2), pages 133-52, September.
  9. Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-37, April. [Downloadable!] (restricted)
  10. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February. [Downloadable!] (restricted)
  11. Jeffrey Carpenter, 2002. "Punishing Free Riders: how group size affects mutual monitoring and the provision of public goods," Middlebury College Working Paper Series 0206, Middlebury College, Department of Economics. [Downloadable!]
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  12. Steffen Huck & Michael Kosfeld, . "The Dynamics of Neighbourhood Watch and Norm Enforcement," IEW - Working Papers iewwp199, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  13. Isaac, R Mark & Walker, James M, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 179-99, February. [Downloadable!] (restricted)
  14. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October. [Downloadable!] (restricted)
  15. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michael Kosfeld & Akira Okada & Arno Riedl, 2006. "Institution Formation in Public Goods Games," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Francesca Bortolami & Luigi Mittone, 2009. "Does Participating in a Collective Decision Affect the Levels of Contributions Provided? An Experimental Investigation," CEEL Working Papers 0902, Computable and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia. [Downloadable!]
  3. Alessandro Balestrino & Cinzia Ciardi, 2007. "Social Norms, Cognitive Dissonance and the Timing of Marriage," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. Alessandro Balestrino, 2007. "It is a Theft but not a Crime," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
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