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Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help

Author

Listed:
  • Sven Fischer

    () (Max Planck Institute for Research on Collective Goods, Bonn)

  • Kristoffel Grechenig

    () (Max Planck Institute for Research on Collective Goods, Bonn)

  • Nicolas Meier

    ()

Abstract

We run several experiments which allow us to compare cooperation under perfect and imperfect information and under a centralized and decentralized punishment regime. We nd that (1) centralization by itself does not improve cooperation and welfare compared to an informal, peer-to-peer punishment regime and (2) centralized punishment is equally sensitive to noise as decentralized punishment, that is, it leads to signi cantly lower cooperation and welfare (total pro ts). Our results shed critical light on the widespread conjecture that the centralization of punishment institutions is welfare increasing in itself.

Suggested Citation

  • Sven Fischer & Kristoffel Grechenig & Nicolas Meier, 2013. "Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_06, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2013_06
    as

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    References listed on IDEAS

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    Cited by:

    1. Markussen, Thomas & Putterman, Louis & Tyran, Jean-Robert, 2016. "Judicial error and cooperation," European Economic Review, Elsevier, vol. 89(C), pages 372-388.
    2. DeAngelo, Gregory & Gee, Laura Katherine, 2018. "Peers or Police? Detection and Sanctions in the Provision of Public Goods," IZA Discussion Papers 11540, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Public Goods; cooperation; centralized punishment; imperfect information; decentralized punishment; peer to peer punishment;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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