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Pure Redistribution and the Provision of Public Goods

Author

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  • Rupert Sausgruber

    (Department of Public Economics, University of Innsbruck)

  • Jean-Robert Tyran

    (Department of Economics, University of Copenhagen)

Abstract

We study pure redistribution as a device to increase cooperation and efficiency in the provision of public goods. Experimental subjects play a two-stage game. The first stage is the standard linear public goods game. In the second stage, subjects can redistribute payoffs among other subjects in their group. We find that cooperation and efficiency increases substantially with this redistribution scheme, and that the redistribution option is popular. Our results provide an intuitive explanation for why an imposed redistribution rule, as proposed by Falkinger (1996), is capable of sustaining cooperation in the provision of public goods.

Suggested Citation

  • Rupert Sausgruber & Jean-Robert Tyran, 2006. "Pure Redistribution and the Provision of Public Goods," Discussion Papers 06-24, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0624
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, vol. 62(3), pages 413-422, November.
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    Cited by:

    1. Reuben, Ernesto & Tyran, Jean-Robert, 2010. "Everyone is a winner: Promoting cooperation through all-can-win intergroup competition," European Journal of Political Economy, Elsevier, vol. 26(1), pages 25-35, March.
    2. Thomas Markussen & Ernesto Reuben & Jean‐Robert Tyran, 2014. "Competition, Cooperation and Collective Choice," Economic Journal, Royal Economic Society, vol. 124(574), pages 163-195, February.
    3. Julian Rauchdobler & Rupert Sausgruber & Jean-Robert Tyran, 2010. "Voting on Thresholds for Public Goods: Experimental Evidence," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 34-64, March.
    4. Fatas, Enrique & Nosenzo, Daniele & Sefton, Martin & Zizzo, Daniel John, 2021. "A self-funding reward mechanism for tax compliance," Journal of Economic Psychology, Elsevier, vol. 86(C).
    5. Page, Talbot & Putterman, Louis & Garcia, Bruno, 2013. "Voluntary contributions with redistribution: The effect of costly sanctions when one person's punishment is another's reward," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 34-48.
    6. Talbot Page & Louis Putterman & Bruno Garcia, 2008. "Getting Punnishment Right: Do Costly Monitoring or Redustributive Punishment Help?," Working Papers 2008-1, Brown University, Department of Economics.

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    More about this item

    Keywords

    experiment; public goods; redistribution;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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