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Punishing Free Riders: how group size affects mutual monitoring and the provision of public goods

  • Jeffrey Carpenter


Standard game theoretic models predict, based on subgame perfection, that public goods will not be provided even if agents are allowed to monitor free riders at some cost. Further, because punishment is not credible in these environments, this prediction is invariant to the size of groups. However, there is now substantial evidence that people are reciprocally motivated and will punish free riders, regardless of the material costs of doing so. To examine the implications of reciprocally-minded agents, we simulate an environment populated with the behavioral strategies often seen in the experimental lab and use the simulation to develop hypotheses that are more specific about why group size should matter when sanctions are allowed. We then test these hypotheses experimentally using the voluntary contribution mechanism. We examine whether the effect of group members or if information about other group members is what is important. We find large groups provide public goods at levels no less than small groups because punishment does not fall in large groups. However, hindrances to monitoring do reduce the provision of the public good.

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Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0206.

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Length: 39 pages
Date of creation: Apr 2002
Date of revision:
Handle: RePEc:mdl:mdlpap:0206
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  3. Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
  4. Carpenter, Jeffrey P. & Matthews, Peter Hans, 2004. "Social Reciprocity," IZA Discussion Papers 1347, Institute for the Study of Labor (IZA).
  5. Carpenter, Jeffrey P. & Bowles, Samuel & Gintis, Herbert, 2006. "Mutual Monitoring in Teams: Theory and Experimental Evidence on the Importance of Reciprocity," IZA Discussion Papers 2106, Institute for the Study of Labor (IZA).
  6. 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.
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  9. Bochet, Olivier & Page, Talbot & Putterman, Louis, 2006. "Communication and punishment in voluntary contribution experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 11-26, May.
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  19. Miller, John H. & Andreoni, James, 1991. "Can evolutionary dynamics explain free riding in experiments?," Economics Letters, Elsevier, vol. 36(1), pages 9-15, May.
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