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The Hired Gun Mechanism

  • James Andreoni
  • Laura K. Gee

We present and experimentally test a mechanism that provides a simple, natural, low cost, and realistic solution to the problem of compliance with socially determined efficient actions, such as contributing to a public good. We note that small self-governing organizations often place enforcement in the hands of an appointed leader-the department chair, the building superintendent, the team captain. This hired gun, we show, need only punish the least compliant group member, and then only punish this person enough so that the person would have rather been the second least compliant. We show experimentally this mechanism, despite having very small penalties out of equilibrium, reaches the full compliance equilibrium almost instantly.

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File URL: http://www.nber.org/papers/w17032.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17032.

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Date of creation: May 2011
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Handle: RePEc:nbr:nberwo:17032
Note: PE
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  1. Ho, Teck Hua & Weigelt, Keith & Camerer, Colin, 1996. "Iterated Dominance and Iterated Best-Response in Experimental P-Beauty Contests," Working Papers 974, California Institute of Technology, Division of the Humanities and Social Sciences.
  2. Jakub Steiner, 2005. "A Trace of Anger is Enough: On the Enforcement of Social Norms," CERGE-EI Working Papers wp246, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  4. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
  5. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
  6. Fudenberg, Drew & Pathak, Parag A., 2010. "Unobserved punishment supports cooperation," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 78-86, February.
  7. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
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