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Monetary and non Monetary Punishment in the Voluntary Contributions Mechanism

  • David Masclet


    (GATE - Groupe d'analyse et de théorie économique - CNRS - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines)

  • Charles Noussair

    (Krannert School of Management, - Purdue University)

  • Steven Tucker

    (Krannert School of Management, - Purdue University)

  • Marie Claire Villeval


    (GATE - Groupe d'analyse et de théorie économique - CNRS - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines)

A demand for behavioral norms arises when members of a group have individual incentives to take actions that reduce the group's overall welfare (James S. Coleman, 1990). Norms require enforcement with a system of sanctions that penalize deviations from acceptable behavior (George C. Homans, 1961). Formal sanctions include fines or restrictions implemented by a legal system or private individuals that impose costs of money and time on the offender. However, informal sanctions such as peer pressure, gossip, or social ostracism might in some cases also be effective deterrents, and expressions of social acceptance might be effective in encouraging group-oriented behavior (Peter M. Blau, 1964). Indeed, the fact that expressions of approval and disapproval are commonly observed in human interaction suggests that they must influence the behavior of at least some individuals. In recognition of the importance of informal sanctions, economists have integrated phenomena such as peer pressure (Eugene Kandel and Edward P. Lazear, 1992; John M. Barron and Kathy Paulson-Gjerde, 1997), and the avoidance of social disapproval (George A. Akerlof, 1980; Heinz Hollander, 1990; Assar Lindbeck et al., 1999) into theoretical models. Social pressures are thought to be a major factor behind high voter participation (Carol-Jean Uhlaner, 1989; Stephen Knack, 1992) and compliance with the law (Tom R. Tyler, 1990).

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Paper provided by HAL in its series Post-Print with number halshs-00175251.

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Date of creation: 2003
Date of revision:
Publication status: Published in The American Economic Review, 2003, 93 (1), pp.366-380
Handle: RePEc:hal:journl:halshs-00175251
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  1. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.
  2. Andreoni, James, 1988. "Why free ride? : Strategies and learning in public goods experiments," Journal of Public Economics, Elsevier, vol. 37(3), pages 291-304, December.
  3. repec:oup:qjecon:v:114:y:1999:i:1:p:1-35 is not listed on IDEAS
  4. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
  5. Weimann, Joachim, 1994. "Individual behaviour in a free riding experiment," Journal of Public Economics, Elsevier, vol. 54(2), pages 185-200, June.
  6. 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.
  7. Isaac, R Mark & Walker, James M, 1988. "Communication and Free-Riding Behavior: The Voluntary Contribution Mechanism," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 585-608, October.
  8. 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.
  9. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  10. Gachter, Simon & Fehr, Ernst, 1999. "Collective action as a social exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 341-369, July.
  11. Claudia Keser & Frans A.A.M. van Winden, 2000. "Conditional Cooperation and Voluntary Contributions to Public Goods," Tinbergen Institute Discussion Papers 00-011/1, Tinbergen Institute.
  12. David Masclet & Charles Noussair & Steve Tucker & Marie Claire Villeval, 2003. "Monetary and non Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00144848, HAL.
  13. repec:oup:qjecon:v:114:y:1999:i:3:p:817-868 is not listed on IDEAS
  14. Andreoni,J. & Croson,R., 1998. "Partners versus strangers : random rematching in public goods experiments," Working papers 11, Wisconsin Madison - Social Systems.
  15. Laury, Susan K. & Walker, James M. & Williams, Arlington W., 1995. "Anonymity and the voluntary provision of public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 365-380, August.
  16. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  17. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
  18. Samuel Bowles & Herbert Gintis, 1998. "Mutual Monitoring in Teams: The Effects of Residual Claimancy and Reciprocity," Research in Economics 98-08-074e, Santa Fe Institute.
  19. Mari Rege & Kjetil Telle, 2001. "An Experimental Investigation of Social Norms," Discussion Papers 310, Statistics Norway, Research Department.
  20. Smith, Vernon L, 1985. "Experimental Economics: Reply," American Economic Review, American Economic Association, vol. 75(1), pages 264-72, March.
  21. Keser, Claudia, 1996. "Voluntary contributions to a public good when partial contribution is a dominant strategy," Economics Letters, Elsevier, vol. 50(3), pages 359-366, March.
  22. Anderson, Simon P. & Goeree, Jacob K. & Holt, Charles A., 1998. "A theoretical analysis of altruism and decision error in public goods games," Journal of Public Economics, Elsevier, vol. 70(2), pages 297-323, November.
  23. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
  24. repec:oup:qjecon:v:94:y:1980:i:4:p:749-75 is not listed on IDEAS
  25. Hollander, Heinz, 1990. "A Social Exchange Approach to Voluntary Cooperation," American Economic Review, American Economic Association, vol. 80(5), pages 1157-67, December.
  26. Sefton, Martin & Steinberg, Richard, 1996. "Reward structures in public good experiments," Journal of Public Economics, Elsevier, vol. 61(2), pages 263-287, August.
  27. Andereoni, J., 1988. "Why Free Ride? Strategies And Learning In Public Goods Experiments," Working papers 375, Wisconsin Madison - Social Systems.
  28. Gary E. Bolton & Jordi Brandts & Elena Katok, 2000. "How strategy sensitive are contributions?," Economic Theory, Springer, vol. 15(2), pages 367-387.
  29. Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
  30. Croson, Rachel T. A., 1996. "Partners and strangers revisited," Economics Letters, Elsevier, vol. 53(1), pages 25-32, October.
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