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Lying in public good games with and without punishment

Author

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  • Bernd Irlenbusch

    (University of Cologne)

  • Janna Ter Meer

    (University of Cologne)

Abstract

We experimentally study a frequently observed public good setting where accurate contribution feedback is not available and group members can send non-verifiable cheap talk messages about their contributions. As feedback, subjects receive only announced contributions or the announced or actual contribution with 50% probability. In this setting, we explore both information transmission and reception as well as the effectiveness of costly peer punishment. Overall, we find that cooperation breaks down in all announcement treatments except when actual contribution feedback is provided some of the time and punishment is available. We identify various constraints to full cooperation relative to the standard public good game. First, subjects make errors in adjusting their beliefs for the announcements of others and, on average, adjust their beliefs downward for a given announcement. Second, we find that significantly more punishment is assigned to high contributors compared to the standard public good game. Furthermore, punishment for low contributors appears to have a smaller disciplining effect. When actual contribution information is provided some of the time we find that these constraints are less severe compared to the setting where only announcements are available.

Suggested Citation

  • Bernd Irlenbusch & Janna Ter Meer, 2015. "Lying in public good games with and without punishment," Cologne Graduate School Working Paper Series 06-02, Cologne Graduate School in Management, Economics and Social Sciences.
    • Handle: RePEc:cgr:cgsser:06-02
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    More about this item

    Keywords

    public goods; punishment; lying; credibility; communication;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact

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