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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. Elinor Ostrom, 2010. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," American Economic Review, American Economic Association, vol. 100(3), pages 641-72, June.
  2. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
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  4. Jean-Robert Tyran & Kenju Kamei & Louis Putterman, 2011. "State or Nature? Formal vs. Informal Sanctioning in the Voluntary Provision of Public Goods," Vienna Economics Papers 1104, University of Vienna, Department of Economics.
  5. Louis Putterman & Jean-Robert Tyran & Kenju Kamei, 2010. "Public Goods and Voting on Formal Sanction Schemes: An Experiment," Discussion Papers 10-02, University of Copenhagen. Department of Economics.
  6. Rockenbach, Bettina & Wolff, Irenaeus, 2009. "Institution design in social dilemmas: How to design if you must?," MPRA Paper 16922, University Library of Munich, Germany.
  7. Umut Ones & Louis Putterman, 2004. "The Ecology of Collective Action: A Public Goods and Sanctions Experiment with Controlled Group Formation," Working Papers 2004-01, Brown University, Department of Economics.
  8. Sebastian Kube & Christian Traxler, 2010. "The Interaction of Legal and Social Norm Enforcement," CESifo Working Paper Series 3091, CESifo Group Munich.
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  11. Oliver Bochet & Talbot Page & Louis Putterman, 2002. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2002-29, Brown University, Department of Economics.
  12. 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.
  13. Jennifer Zelmer, 2003. "Linear Public Goods Experiments: A Meta-Analysis," Experimental Economics, Springer, vol. 6(3), pages 299-310, November.
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  15. 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.
  16. 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.
  17. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer, vol. 14(1), pages 47-83, March.
  18. Matthias Cinyabuguma & Talbot Page & Louis Putterman, 2006. "Can second-order punishment deter perverse punishment?," Experimental Economics, Springer, vol. 9(3), pages 265-279, September.
  19. Nikos Nikiforakis, 2010. "Experimental Economics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 337-345.
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  22. 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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Citations

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Cited by:
  1. Rebecca B. Morton & Marco Piovesan & Jean-Robert Tyran, 2012. "The Dark Side of the Vote - Biased Voters, Social Information, and Information Aggregation Through Majority Voting," Discussion Papers 12-08, University of Copenhagen. Department of Economics.
  2. Kenju Kamei & Louis Putterman & Jean-Robert Tyran, 2011. "State or Nature? Formal vs. Informal Sanctioning in the Voluntary Provision of Public Goods," Discussion Papers 11-05, University of Copenhagen. Department of Economics.
  3. Thöni, Christian & Tyran, Jean-Robert & Wengström, Erik, 2012. "Microfoundations of social capital," Journal of Public Economics, Elsevier, vol. 96(7-8), pages 635-643.
  4. Boyu Zhang & Cong Li & Hannelore Silva & Peter Bednarik & Karl Sigmund, 2014. "The evolution of sanctioning institutions: an experimental approach to the social contract," Experimental Economics, Springer, vol. 17(2), pages 285-303, June.
  5. Loukas Balafoutas & Martin G. Kocher & Louis Putterman & Matthias Sutter, 2010. "Equality, Equity and Incentives: An Experiment," Working Papers 2010-26, Faculty of Economics and Statistics, University of Innsbruck.
  6. Tiezzi, Silvia & Xiao, Erte, 2013. "Time Delay and Support for Taxation," MPRA Paper 51233, University Library of Munich, Germany.
  7. Thomas Markussen & Ernesto Reuben & Jean‐Robert Tyran, 2014. "Competition, Cooperation and Collective Choice," Economic Journal, Royal Economic Society, vol. 124(574), pages F163-F195, 02.
  8. Roberto Galbiati & Karl Schlag & Joel van der Weele, 2011. "Sanctions that Signal: an Experiment," Vienna Economics Papers 1107, University of Vienna, Department of Economics.
  9. 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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