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Self-Organization for Collective Action: An Experimental Study of Voting on Formal, Informal, and No Sanction Regimes

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Author Info

  • Thomas Markussen

    (Department of Economics, University of Copenhagen)

  • Louis Putterman

    (Brown University)

  • Jean-Robert Tyran

    (University of Vienna)

Abstract

Entrusting the power to punish to a central authority is a hallmark of civilization. We study a collective action dilemma in which self-interest should produce a sub-optimal outcome absent sanctions for non-cooperation. We then test experimentally whether subjects make the theoretically optimal choice of a formal sanction scheme that costs less than the surplus it makes possible, or instead opt for the use of informal sanctions or no sanctions. Most groups adopt formal sanctions when they are of deterrent magnitude and cost a small fraction (10%) of the potential surplus. Contrary to the standard theoretical prediction, however, most groups choose informal sanctions when formal sanctions are more costly (40% of the surplus). Being adopted by voting appears to enhance the efficiency of both informal sanctions and non-deterrent formal sanctions.

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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 11-04.

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Length: 44 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:kud:kuiedp:1104

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Keywords: formal sanctions; informal sanctions; experiment; voting; cooperation; punishment;

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References

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  1. Anabela Botelho & Glenn W. Harrison & Lígia Pinto & Elisabet E. Rutstrom, 2005. "Social norms and social choice," NIMA Working Papers 30, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
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  7. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
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  12. Reuben Ernesto & Riedl Arno, 2009. "Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations," Research Memorandum 029, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
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  14. Ertan, Arhan & Page, Talbot & Putterman, Louis, 2009. "Who to punish? Individual decisions and majority rule in mitigating the free rider problem," European Economic Review, Elsevier, vol. 53(5), pages 495-511, July.
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  18. Pedro Dal Bo & Andrew Foster & Louis Putterman, 2007. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy," Working Papers 2007-9, Brown University, Department of Economics.
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Citations

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Cited by:
  1. Morton, Rebecca & Piovesan, Marco & Tyran, Jean-Robert, 2012. "The Dark Side of the Vote: Biased Voters, Social Information, and Information Aggregation Through Majority Voting," CEPR Discussion Papers 9098, C.E.P.R. Discussion Papers.
  2. Roberto Galbiati & Karl Schlag & Joel van der Weele, 2011. "Sanctions that Signal: an Experiment," Vienna Economics Papers 1107, University of Vienna, Department of Economics.
  3. Christian Thöni & Jean-Robert Tyran & Erik Wengström, 2009. "Microfoundations of Social Capital," Discussion Papers 09-24, University of Copenhagen. Department of Economics, revised Sep 2010.
  4. Markussen, Thomas & Reuben, Ernesto & Tyran, Jean-Robert, 2012. "Competition, Cooperation, and Collective Choice," CEPR Discussion Papers 9099, C.E.P.R. Discussion Papers.
  5. Tiezzi, Silvia & Xiao, Erte, 2013. "Time Delay and Support for Taxation," MPRA Paper 51233, University Library of Munich, Germany.
  6. Kenju Kamei & Louis Putterman & Jean-Robert Tyran, 2011. "State or Nature? Formal vs. Informal Sanctioning in the Voluntary Provision of Public Goods," Working Papers 2011-3, Brown University, Department of Economics.
  7. Rupert Sausgruber & Jean-Robert Tyran, 2013. "Discriminatory Taxes are Unpopular - Even when they are Efficient and Distributionally Fair," Discussion Papers 13-14, University of Copenhagen. Department of Economics.

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