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Pure Redistribution and the Provision of Public Goods

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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.

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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 06-24.

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Length: 7 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:kud:kuiedp:0624

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Keywords: experiment; public goods; redistribution;

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References

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  1. Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
  2. Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, Elsevier, vol. 62(3), pages 413-422, November.
  3. Josef Falkinger & Ernst Fehr & Simon Gaechter, . "A Simple Mechanism for the Efficient Provision of Public Goods - Experimental Evidence," IEW - Working Papers 003, Institute for Empirical Research in Economics - University of Zurich.
  4. Martin Sefton & Robert S. Shupp & James Walker, 2005. "The Effect of Rewards and Sanctions in Provision of Public Goods," Working Papers, Ball State University, Department of Economics 200504, Ball State University, Department of Economics, revised Feb 2005.
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Cited by:
  1. Ernesto Reuben & Jean-Robert Tyran, 2008. "Everyone Is A Winner: Promoting Cooperation Through Non-Rival Intergroup Competition," Discussion Papers 08-26, University of Copenhagen. Department of Economics.
  2. Thomas Markussen & Ernesto Reuben & Jean‐Robert Tyran, 2014. "Competition, Cooperation and Collective Choice," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 124(574), pages F163-F195, 02.
  3. 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.
  4. Julian Rauchdobler & Rupert Sausgruber & Jean-Robert Tyran, 2009. "Voting on Thresholds for Public Goods: Experimental Evidence," Discussion Papers 09-27, University of Copenhagen. Department of Economics.
  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, Elsevier, vol. 95(C), pages 34-48.
  6. Alexander W. Cappelen & Ulrik H. Nielsen & Erik Ø. Sørensen & Bertil Tungodden & Jean-Robert Tyran, 2012. "Give and Take in Dictator Games," Discussion Papers 12-05, University of Copenhagen. Department of Economics.

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