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An individualistic approach to institution formation in public good games

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  • Ramalingam, Abhijit
  • Godoy, Sara
  • Morales, Antonio J.
  • Walker, James M.

Abstract

In a repeated public goods setting, we explore whether individuals, acting unilaterally, will provide an effective sanctioning institution. Subjects first choose independently whether they will participate in a sanctioning stage that follows a contribution stage. Only those who gave themselves the “right” to sanction can do so. We find that the effectiveness of the institution may not require provision of the institution at the level of the group. Individuals acting unilaterally are able to provide sanctioning institutions that effectively raise cooperation. The effectiveness of the institution, however, depends on whether the “right” to sanction entails a monetary cost or not.

Suggested Citation

  • Ramalingam, Abhijit & Godoy, Sara & Morales, Antonio J. & Walker, James M., 2016. "An individualistic approach to institution formation in public good games," Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 18-36.
  • Handle: RePEc:eee:jeborg:v:129:y:2016:i:c:p:18-36
    DOI: 10.1016/j.jebo.2016.06.003
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    Cited by:

    1. repec:eee:soceco:v:73:y:2018:i:c:p:66-73 is not listed on IDEAS
    2. DeAngelo, Gregory & Gee, Laura Katherine, 2018. "Peers or Police? Detection and Sanctions in the Provision of Public Goods," IZA Discussion Papers 11540, Institute for the Study of Labor (IZA).
    3. Altemeyer-Bartscher, Martin & Bershadskyy, Dmitri & Schreck, Philipp & Timme, Florian, 2017. "Endogenous institution formation in public good games: The effect of economic education," IWH Discussion Papers 29/2017, Halle Institute for Economic Research (IWH).
    4. Abhijit Ramalingam & Antonio J. Morales & James M. Walker, 2018. "Peer Punishment in Repeated Isomorphic Give and Take Social Dilemmas," Working Papers 18-15, Department of Economics, Appalachian State University.
    5. Abhijit Ramalingam & Antonio J. Morales & James M. Walker, 2016. "Variation in experimental instructions: Punishment in public goods games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-22R, School of Economics, University of East Anglia, Norwich, UK..

    More about this item

    Keywords

    Public goods; Experiment; Punishment; Institution formation; Unilateral provision; Cooperation;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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