Punishing Free Riders: how group size affects mutual monitoring and the provision of public goods
Abstract
Standard game theoretic models predict, based on subgame perfection, that public goods will not be provided even if agents are allowed to monitor free riders at some cost. Further, because punishment is not credible in these environments, this prediction is invariant to the size of groups. However, there is now substantial evidence that people are reciprocally motivated and will punish free riders, regardless of the material costs of doing so. To examine the implications of reciprocally-minded agents, we simulate an environment populated with the behavioral strategies often seen in the experimental lab and use the simulation to develop hypotheses that are more specific about why group size should matter when sanctions are allowed. We then test these hypotheses experimentally using the voluntary contribution mechanism. We examine whether the effect of group members or if information about other group members is what is important. We find large groups provide public goods at levels no less than small groups because punishment does not fall in large groups. However, hindrances to monitoring do reduce the provision of the public good.Download Info
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Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0206.Length: 39 pages
Date of creation: Apr 2002
Date of revision:
Handle: RePEc:mdl:mdlpap:0206
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Related research
Keywords: Public Goods; Mutual Monitoring; Group Soze; Experiment; Simulation;Other versions of this item:
- Carpenter, Jeffrey P., 2007. "Punishing free-riders: How group size affects mutual monitoring and the provision of public goods," Games and Economic Behavior, Elsevier, vol. 60(1), pages 31-51, July.
- Carpenter, Jeffrey P., 2004. "Punishing Free-Riders: How Group Size Affects Mutual Monitoring and the Provision of Public Goods," IZA Discussion Papers 1337, Institute for the Study of Labor (IZA).
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-07-21 (All new papers)
- NEP-CDM-2002-07-21 (Collective Decision-Making)
- NEP-EXP-2002-07-21 (Experimental Economics)
- NEP-MIC-2002-07-22 (Microeconomics)
- NEP-PBE-2002-07-21 (Public Economics)
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