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A Comparative Statics Analysis of Punishment in Public-Good Experiments

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Author Info
Nikos Nikiforakis () (Department of Economics, Royal Holloway, University of London)
Hans-Theo Normann () (Department of Economics, Royal Holloway, University of London)

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Abstract

This paper provides a comparative statics analysis of punishment in public-good experiments. We vary systematically the effectiveness of punishment, that is, the factor by which punishment reduces the punished player’s income, and we find that contributions to the public good increase monotonically in effectiveness. High effectiveness leads to near complete contribution rates and welfare improvements. Below a certain threshold, however, punishment cannot prevent the decay of cooperation found in the public-good game without punishment. In these cases, the possibility to punish may even worsen welfare. Finally, we show that punishment is a normal and inferior good.

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Publisher Info
Paper provided by Department of Economics, Royal Holloway University of London in its series Royal Holloway, University of London: Discussion Papers in Economics with number 05/07.

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Length: 22 pages
Date of creation: Jun 2005
Date of revision: Jun 2005
Handle: RePEc:hol:holodi:0507

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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. Nikos Nikiforakis, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Experimental 0403001, EconWPA. [Downloadable!]
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  2. Anderson, Christopher M. & Putterman, Louis, 2006. "Do non-strategic sanctions obey the law of demand? The demand for punishment in the voluntary contribution mechanism," Games and Economic Behavior, Elsevier, vol. 54(1), pages 1-24, January. [Downloadable!] (restricted)
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  3. 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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  4. Olivier Bochet & Talbot Page & Louis Putterman, 2005. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2005-09, Brown University, Department of Economics. [Downloadable!]
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  5. David Masclet et al., 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March. [Downloadable!] (restricted)
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  6. Martin Sefton & Robert Shupp & James M. Walker, 2006. "The Effect of Rewards and Sanctions in Provision of Public Goods," Caepr Working Papers 2006-005, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Aug 2006. [Downloadable!]
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  7. 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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  8. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers iewwp004, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  9. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
  10. Matthias Cinyabuguma & Talbot Page & Louis Putterman, 2004. "On Perverse and Second-Order Punishment in Public Goods Experiments with Decentralized Sanctioning," Working Papers 2004-12, Brown University, Department of Economics. [Downloadable!]
  11. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics. [Downloadable!]
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(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. Astrid Hopfensitz & Ernesto Reuben, 2005. "The Importance of Emotions for the Effectiveness of Social Punishment," Discussion Papers 06-09, University of Copenhagen. Department of Economics, revised Mar 2006. [Downloadable!]
    Other versions:
  2. Peter Duersch & Maros Servátka, 2007. "Risky Punishment and Reward in the Prisoner’s Dilemma," Working Papers 0451, University of Heidelberg, Department of Economics, revised Sep 2007. [Downloadable!]
  3. Michele Bernasconi, Luca Corazzini, Sebastian Kube, Michel André Maréchal., 2007. "Two are Better Than One! Individuals' Contributions to "Unpacked" Public Goods," ISLA Working Papers 30, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy. [Downloadable!]
  4. Visser, Martine & Burns, Justine, 2006. "Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods," Working Papers in Economics 219, Göteborg University, Department of Economics. [Downloadable!]
  5. Kosfeld Michael & Okada Akira & Riedl Arno, 2006. "Institution Formation in Public Goods Games," Research Memoranda 029, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
    Other versions:
  6. Haigner, Stefan & Kocher, Martin & Sutter, Matthias, 2006. "Choosing the Stick or the Carrot? Endogenous Institutional Choice in Social Dilemma Situations," CEPR Discussion Papers 5497, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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