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Public Goods Provision and Sanctioning in Privileged Groups

  • Reuben, Ernesto

    ()

    (Columbia University)

  • Riedl, Arno

    ()

    (Maastricht University)

In public good provision, privileged groups enjoy the advantage that some of its members find it optimal to supply a positive amount of the public good. However, their inherent asymmetric nature may make the enforcement of cooperative behavior through informal sanctioning harder to accomplish. In this paper we experimentally investigate public good provision in normal and privileged groups with and without decentralized punishment. We find that compared to normal groups, privileged groups are relatively ineffective in using costly sanctions to increase everyone's contributions. Punishment is less targeted towards strong free-riders and they exhibit a weaker increase in contributions after being punished. Thus, we show that privileged groups are not as privileged as they initially seem.

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File URL: http://ftp.iza.org/dp2916.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2916.

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Length: 33 pages
Date of creation: Jul 2007
Date of revision:
Publication status: published in: Journal of Conflict Resolution, 2009, 53 (1), 72-93
Handle: RePEc:iza:izadps:dp2916
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  1. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
  2. Palfrey, Thomas R & Prisbrey, Jeffrey E, 1997. "Anomalous Behavior in Public Goods Experiments: How Much and Why?," American Economic Review, American Economic Association, vol. 87(5), pages 829-46, December.
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  9. Oliver Bochet & Talbot Page & Louis Putterman, 2002. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2002-29, Brown University, Department of Economics.
  10. Astrid Hopfensitz & Ernesto Reuben, 2009. "The Importance of Emotions for the Effectiveness of Social Punishment," Economic Journal, Royal Economic Society, vol. 119(540), pages 1534-1559, October.
  11. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  12. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences With Simple Tests," The Quarterly Journal of Economics, MIT Press, vol. 117(3), pages 817-869, August.
  13. Gary E Bolton & Axel Ockenfels, 1997. "A Theory of Equity, Reciprocity, and Competition," Levine's Working Paper Archive 1889, David K. Levine.
  14. Ernesto Reuben & Frans van Winden, 2005. "Negative Reciprocity and the Interaction of Emotions and Fairness Norms," Tinbergen Institute Discussion Papers 05-014/1, Tinbergen Institute.
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  16. Tatsuyoshi, S. & Nakamura, H., 1995. "The 'Spite' Dilema in Voluntary Contribution Mechanism Experiments," ISER Discussion Paper 0370, Institute of Social and Economic Research, Osaka University.
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