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Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations

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Author Info
Ernesto Reuben ()
Arno Riedl ()

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Abstract

Economic and social interaction takes place between individuals with heterogeneous characteristics. We investigate experimentally the emergence and informal enforcement of different contribution norms to a public good in homogeneous and different heterogeneous groups. When punishment is not allowed all groups converge towards free-riding. With punishment, contributions increase and differ distinctly across groups and individuals with different induced characteristics. We show econometrically that these differences are not accidentally but enforced by punishment. The enforced contribution norms are related to fairness ideas of equity regarding the contributions but not regarding the earnings. Individuals with different characteristics tacitly agree on the norm to be enforced, even if this leads to large payoff differences. Our results also emphasize the role of details of the environment that may alter focal contribution norms in an important way.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2725.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2725

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Related research
Keywords: public good; heterogeneous groups; punishment; cooperation; social norms; norm enforcement;

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Find related papers by JEL classification:
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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  29. Vivek Ghosal, 2009. "Business Strategy and Firm Reorganization under Changing Market Conditions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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