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Group Size, Coordination, and the Effectiveness of the Punishment Mechanism in the VCM: An Experimental Investigation

  • Bin Xu

    ()

    (Public Administration College, Zhejiang Gongshang University and Experimental Social Science Laboratory, Zhejiang University.)

  • Bram Cadsby

    ()

    (Department of Economics, University of Guelph.)

  • Liangcong Fan

    ()

    (College of Public Administration, Zhejiang University.)

  • Fei Song

    ()

    (Ted Rogers School of Management, Ryerson University.)

In this study, we examine the effectiveness of the individual-punishment mechanism in larger groups, comparing groups of four to groups of 40 participants. We find that the individual punishment mechanism is remarkably robust when the MPCR is held constant despite the coordination problems inherent in an institution relying on decentralized individual punishment decisions in the context of a larger group. This reflects increased per-capita expenditures on punishment that offset the greater coordination difficulties in the larger group. However, if the marginal group return stays constant, resulting in an MPCR that shrinks with group size, no such offset occurs and punishment loses much but not all of its effectiveness at encouraging voluntary contributions to a public good.

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Paper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 1110.

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Length: 25 pages
Date of creation: 2011
Date of revision:
Publication status: Published in Games (2013) Vol. 4, 1, 89-105.
Handle: RePEc:gue:guelph:2011-10.
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Web page: https://www.uoguelph.ca/economics/

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  1. 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.
  2. Masclet, D. & Noussair, C. & Tucker, S. & Villeval, M.C., 2001. "Monetary and Non-monetary Punishment in the Voluntary Contributions Mechanism," Purdue University Economics Working Papers 1141, Purdue University, Department of Economics.
  3. Olivier Bochet & Talbot Page & Louis Putterman, 2005. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2005-09, Brown University, Department of Economics.
  4. Jeffrey Carpenter, 2002. "Punishing Free Riders: how group size affects mutual monitoring and the provision of public goods," Middlebury College Working Paper Series 0206, Middlebury College, Department of Economics.
  5. Isaac, R. Mark & Walker, James M. & Williams, Arlington W., 1994. "Group size and the voluntary provision of public goods : Experimental evidence utilizing large groups," Journal of Public Economics, Elsevier, vol. 54(1), pages 1-36, May.
  6. James Andreoni & William Harbaugh & Lise Vesterlund, 2003. "The Carrot or the Stick: Rewards, Punishments, and Cooperation," American Economic Review, American Economic Association, vol. 93(3), pages 893-902, June.
  7. Marco Casari, 2005. "On the Design of Peer Punishment Experiments," Experimental Economics, Springer, vol. 8(2), pages 107-115, June.
  8. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
  9. Casari, Marco & Luini, Luigi, 2009. "Cooperation under alternative punishment institutions: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 273-282, August.
  10. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  11. Louis Putterman & Christopher M. Anderson, 2003. "Do Non-strategic Sanctions Obey the Law of Demand? The Demand for Punishment in the Voluntary Contribution Mechanism," Working Papers 2003-15, Brown University, Department of Economics.
  12. Rand, David Gertler & Dreber, Anna & Fudenberg, Drew & Ellingson, Tore & Nowak, Martin A., 2009. "Positive Interactions Promote Public Cooperation," Scholarly Articles 3804483, Harvard University Department of Economics.
  13. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and non Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00175251, HAL.
  14. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2001. "Monetary and Non-Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00151423, HAL.
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