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Public Goods Provision and Sanctioning in Privileged Groups

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  • Reuben, Ernesto

    (New York University, Abu Dhabi)

  • Riedl, Arno

    (Maastricht University)

Abstract

In public good provision, privileged groups enjoy the advantage that some of its members find it optimal to supply a positive amount of the public good. However, their inherent asymmetric nature may make the enforcement of cooperative behavior through informal sanctioning harder to accomplish. In this paper we experimentally investigate public good provision in normal and privileged groups with and without decentralized punishment. We find that compared to normal groups, privileged groups are relatively ineffective in using costly sanctions to increase everyone's contributions. Punishment is less targeted towards strong free-riders and they exhibit a weaker increase in contributions after being punished. Thus, we show that privileged groups are not as privileged as they initially seem.

Suggested Citation

  • Reuben, Ernesto & Riedl, Arno, 2007. "Public Goods Provision and Sanctioning in Privileged Groups," IZA Discussion Papers 2916, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2916
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    More about this item

    Keywords

    privileged groups; public goods; punishment; cooperation; collective action;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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