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The Design of (De)centralized Punishment Institutions for Sustaining Co-operation

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  • Michael Kosfeld

    ()
    (University of Z�rich)

  • Arno Riedl

    ()
    (Faculty of Economics and Econometrics, Universiteit van Amsterdam)

Abstract

This discussion paper has resulted in the publication (2007) 'Order without law? Experimental evidence on voluntary cooperation and sanctioning', 2007, KritV - Kritische Vierteljahresschrift fur Gesetzgebung und Rechtswissenschaft , 90, 1-2, 140-155.In this paper we discuss experimental evidence for two different institutional approaches to a possible resolution of the fundamental conflict between social welfare maximization and individual utility maximization. The basic workhorse for modelling this conflict is the voluntary contribution of a group of individuals to a public good. The common element of the investigated mechanisms is that both are based on the imposition of sanctions for free-riding behavior. The main difference between them concerns the question of “who punishes”. In the first approach, punishment is executed by the group members themselves individually, i.e., punishment is decentral in nature. The second approach is based on the idea that individuals may be willing to delegate the punishment to a central, external authority. The key questions to answered are, whether individuals are willing and able to implement such punishment institution, how successfully implemented institutions look like, and whether they can increase the cooperation level of individuals in the group.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-025/1.

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Date of creation: 27 Feb 2004
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Handle: RePEc:dgr:uvatin:20040025

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Related research

Keywords: public good; sanction; punishment; institution; cooperation; experiment;

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References

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  1. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
  2. Louis Putterman & Christopher M. Anderson, 2003. "Do Non-strategic Sanctions Obey the Law of Demand? The Demand for Punishment in the Voluntary Contribution Mechanism," Working Papers 2003-15, Brown University, Department of Economics.
  3. Josef Falkinger, 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March.
  4. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
  5. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
  6. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October.
  7. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August.
  8. Giorgio Coricelli & Dietmar Fehr & Gerlinde Fellner, 2003. "Partner selection in public goods experiments," Papers on Strategic Interaction 2003-13, Max Planck Institute of Economics, Strategic Interaction Group.
  9. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April.
  10. Ernst Fehr & Simon Gaechter, 2003. "Altruistic Punishment in Humans," Microeconomics 0305006, EconWPA.
  11. Okada, Akira, 1993. " The Possibility of Cooperation in an n-Person Prisoners' Dilemma with Institutional Arrangements," Public Choice, Springer, vol. 77(3), pages 629-56, November.
  12. 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.
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Citations

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Cited by:
  1. Francesca Bortolami & Luigi Mittone, 2009. "Does Participating in a Collective Decision Affect the Levels of Contributions Provided? An Experimental Investigation," CEEL Working Papers 0902, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  2. Casari, Marco & Luini, Luigi, 2005. "Group Cooperation Under Alternative Peer Punishment Technologies: An Experiment," Purdue University Economics Working Papers 1176, Purdue University, Department of Economics.
  3. Grimm, Veronika & Mengel, Friederike, 2009. "Cooperation in viscous populations--Experimental evidence," Games and Economic Behavior, Elsevier, vol. 66(1), pages 202-220, May.
  4. Friederike Mengel & Veronika Grimm, 2007. "Group Selection With Imperfect Separation - An Experiment," Working Papers. Serie AD 2007-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Martijn Egas & Arno Riedl, 2005. "The Economics of Altruistic Punishment and the Demise of Cooperation," Tinbergen Institute Discussion Papers 05-065/1, Tinbergen Institute.
  6. Dai, Darong, 2011. "利他惩罚:通往演化彼岸的桥
    [Altruistic Punishment: the Bridge Leading to the Other Side of the Evolution]
    ," MPRA Paper 40262, University Library of Munich, Germany.
  7. Dai, Darong, 2011. "Altruistic Punishment: the Bridge Leading to the Other Side of the Evolution," MPRA Paper 40512, University Library of Munich, Germany.
  8. Róbert F. Veszteg & Erita Narhetali, 2010. "Public-good games and the Balinese," International Journal of Social Economics, Emerald Group Publishing, vol. 37(9), pages 660-675, September.
  9. Josef Falkinger, 2004. "Noncooperative Support of Public Norm Enforcement in Large Societies," CESifo Working Paper Series 1368, CESifo Group Munich.
  10. Sven Fischer & Kristoffel Grechenig & Nicolas Meier, 2013. "Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2013_06, Max Planck Institute for Research on Collective Goods.

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