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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. 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.
  2. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
  3. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
  4. 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.
  5. Christian Thöni & Jean-Robert Tyran & Erik Wengström, 2010. "Microfoundations of Social Capital," NRN working papers 2010-19, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  6. Nikos Nikiforakis & Hans-Theo Normann, 2008. "A comparative statics analysis of punishment in public-good experiments," Experimental Economics, Springer, vol. 11(4), pages 358-369, December.
  7. Bochet, Olivier & Page, Talbot & Putterman, Louis, 2006. "Communication and punishment in voluntary contribution experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 11-26, May.
  8. Sebastian Kube & Christian Traxler, 2010. "The Interaction of Legal and Social Norm Enforcement," CESifo Working Paper Series 3091, CESifo Group Munich.
  9. 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.
  10. Rockenbach, Bettina & Wolff, Irenaeus, 2009. "Institution design in social dilemmas: How to design if you must?," MPRA Paper 16922, University Library of Munich, Germany.
  11. Laurent Denant-Boemont & David Masclet & Charles Noussair, 2007. "Punishment, counterpunishment and sanction enforcement in a social dilemma experiment," Economic Theory, Springer, vol. 33(1), pages 145-167, October.
  12. Louis Puttermann & Jean-Robert Tyran & Kenju Kamei, 2010. "Public Goods and Voting on Formal Sanction Schemes: An Experiment," NRN working papers 2010-20, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  13. 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.
  14. Pedro Dal Bo & Andrew Foster & Louis Putterman, 2010. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy," American Economic Review, American Economic Association, vol. 100(5), pages 2205-29, December.
  15. Martin Sefton & Robert S. Shupp & James Walker, 2005. "The Effect of Rewards and Sanctions in Provision of Public Goods," Working Papers 200504, Ball State University, Department of Economics, revised Feb 2005.
  16. Jean-Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non-deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, 03.
  17. 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.
  18. Ostrom, Elinor, 2009. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," Nobel Prize in Economics documents 2009-4, Nobel Prize Committee.
  19. Haigner, Stefan & Kocher, Martin & Sutter, Matthias, 2006. "Choosing the Stick or the Carrot? Endogenous Institutional Choice in Social Dilemma Situations," CEPR Discussion Papers 5497, C.E.P.R. Discussion Papers.
  20. repec:feb:artefa:0036 is not listed on IDEAS
  21. 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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Citations

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Cited by:
  1. 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.
  2. Markussen, Thomas & Reuben, Ernesto & Tyran, Jean-Robert, 2012. "Competition, Cooperation, and Collective Choice," IZA Discussion Papers 6620, Institute for the Study of Labor (IZA).
  3. 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.

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