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Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations

  • Reuben, Ernesto

    ()

    (New York University, Abu Dhabi)

  • Riedl, Arno

    ()

    (Maastricht University)

Economic and social interaction takes place between individuals with heterogeneous characteristics. We investigate experimentally the emergence and informal enforcement of different contribution norms to a public good in homogeneous and different heterogeneous groups. When punishment is not allowed all groups converge towards free-riding. With punishment, contributions increase and differ distinctly across groups and individuals with different induced characteristics. We show econometrically that these differences are not accidental but enforced by punishment. The enforced contribution norms are related to fairness ideas of equity regarding contribution possibilities but not regarding earnings. Individuals with different characteristics tacitly agree on the norm to be enforced, even if this leads to large payoff differences. Our results also emphasize the role of details of the environment that may alter focal contribution norms in an important way.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4303.

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Length: 27 pages
Date of creation: Jul 2009
Publication status: published in: Games and Economic Behavior, 2013, 77 (1), 122-137
Handle: RePEc:iza:izadps:dp4303
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