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The Effect of Rewards and Sanctions in Provision of Public Goods

Author

Listed:
  • Martin Sefton

    (University of Nottingham)

  • Robert Shupp

    (Ball State University)

  • James M. Walker

    (Indiana University Bloomington)

Abstract

A growing number of field and experimental studies focus on the institutional arrangements by which individuals are able to solve collective action problems. Important in this research is the role of reciprocity and institutions that facilitate cooperation via opportunities for monitoring, sanctioning, and rewarding others. Sanctions represent a cost to both the participant imposing the sanction and the individual receiving the sanction. Rewards represent a zero sum transfer from participants giving to those receiving rewards. We contrast reward and sanction institutions in regard to their impact on cooperation and efficiency in the context of a public goods experiment.

Suggested Citation

  • Martin Sefton & Robert Shupp & James M. Walker, 2006. "The Effect of Rewards and Sanctions in Provision of Public Goods," CAEPR Working Papers 2006-005, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington, revised Aug 2006.
    • Handle: RePEc:inu:caeprp:2006005
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    References listed on IDEAS

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    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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