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Group Size, Coordination, and the Effectiveness of the Punishment Mechanism in the VCM: An Experimental Investigation

Author

Listed:
  • Bin Xu

    (Public Administration College, Zhejiang Gongshang University and Experimental Social Science Laboratory, Zhejiang University.)

  • Bram Cadsby

    (Department of Economics, University of Guelph.)

  • Liangcong Fan

    (College of Public Administration, Zhejiang University.)

  • Fei Song

    (Ted Rogers School of Management, Ryerson University.)

Abstract

In this study, we examine the effectiveness of the individual-punishment mechanism in larger groups, comparing groups of four to groups of 40 participants. We find that the individual punishment mechanism is remarkably robust when the MPCR is held constant despite the coordination problems inherent in an institution relying on decentralized individual punishment decisions in the context of a larger group. This reflects increased per-capita expenditures on punishment that offset the greater coordination difficulties in the larger group. However, if the marginal group return stays constant, resulting in an MPCR that shrinks with group size, no such offset occurs and punishment loses much but not all of its effectiveness at encouraging voluntary contributions to a public good.

Suggested Citation

  • Bin Xu & Bram Cadsby & Liangcong Fan & Fei Song, 2011. "Group Size, Coordination, and the Effectiveness of the Punishment Mechanism in the VCM: An Experimental Investigation," Working Papers 1110, University of Guelph, Department of Economics and Finance.
    • Handle: RePEc:gue:guelph:2011-10.
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    References listed on IDEAS

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    More about this item

    Keywords

    Experiment; Public Good; Punishment; Large Groups;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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