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Institutional endogeneity and third-party punishment in social dilemmas

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  • Marcin, Isabel
  • Robalo, Pedro
  • Tausch, Franziska

Abstract

This paper studies experimentally how the endogeneity of sanctioning institutions affects the severity of punishment in social dilemmas. We allow individuals to vote on the introduction of third-party-administered sanctions, and compare situations in which the adoption of this institution is endogenously decided via majority voting to situations in which it is exogenously imposed by the experimenter. Our experimental design precludes the self-selection and signaling effects that arise when subjects can vote on the institutional setting. We find that punishment is significantly higher when the sanctioning institution is exogenous, which can be explained by a difference in the effectiveness of punishment. Subjects respond to punishment more strongly when the sanctioning institution is endogenously chosen. As a result, a given cooperation level can be reached through milder punishment when third-party sanctions are endogenous.

Suggested Citation

  • Marcin, Isabel & Robalo, Pedro & Tausch, Franziska, 2019. "Institutional endogeneity and third-party punishment in social dilemmas," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 243-264.
  • Handle: RePEc:eee:jeborg:v:161:y:2019:i:c:p:243-264
    DOI: 10.1016/j.jebo.2019.03.007
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    Cited by:

    1. repec:oup:jleorg:v:35:y:2019:i:2:p:364-393. is not listed on IDEAS
    2. Pascal Langenbach & Franziska Tausch, 2017. "Inherited Institutions: Cooperation in the Light of Democratic Legitimacy," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2017_01, Max Planck Institute for Research on Collective Goods.
    3. Pedro Dal Bo & Andrew Foster & Kenju Kamei, 2019. "The Democracy Effect: a weights-based identification strategy," Working Papers 2019-4, Brown University, Department of Economics.
    4. Kamei, Kenju, 2017. "Altruistic Norm Enforcement and Decision-Making Format in a Dilemma: Experimental Evidence," MPRA Paper 76641, University Library of Munich, Germany.

    More about this item

    Keywords

    Endogenous institutions; Third-party punishment; Voting; Social dilemma; Public good;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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