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Designing Institutions for Social Dilemmas

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  • Bettina Rockenbach
  • Irenaeus Wolff

Abstract

Considerable experimental evidence has been collected on rules enhancing contributions in public goods dilemmas. These studies either confront subjects with pre-specified rules or have subjects choose between different rule environments. In this paper, we completely endogenize the institution design process by asking subjects to design and repeatedly improve rule sets for a public goods problem in order to investigate which rules social planners facing a social dilemma “invent†and how these rules develop over time. We make several noteworthy observations, in particular the strong and successful use of framing, the concealment of individual contribution information and the decreasing use of punishment.

Suggested Citation

  • Bettina Rockenbach & Irenaeus Wolff, 2016. "Designing Institutions for Social Dilemmas," TWI Research Paper Series 104, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    • Handle: RePEc:twi:respas:0104
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    2. Astrid Dannenberg & Carlo Gallier, 2020. "The choice of institutions to solve cooperation problems: a survey of experimental research," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 716-749, September.
    3. Liu, Manwei & van der Heijden, Eline, 2019. "Majority rule or dictatorship? The role of collective-choice rules in resolving social dilemmas with endogenous institutions," Discussion Paper 2019-011, Tilburg University, Center for Economic Research.
    4. Keser Claudia & Gaudeul Alexia, 2016. "Foreword: Special Issue in Honor of Reinhard Selten’s 85th Birthday," German Economic Review, De Gruyter, vol. 17(3), pages 277-283, August.
    5. Evgeny Kagan & Stephen Leider & William S. Lovejoy, 2020. "Equity Contracts and Incentive Design in Start-Up Teams," Management Science, INFORMS, vol. 66(10), pages 4879-4898, October.
    6. Dannenberg, Astrid & Gallier, Carlo, 2019. "The choice of institutions to solve cooperation problems: A survey of experimental research," ZEW Discussion Papers 19-021, ZEW - Leibniz Centre for European Economic Research.
    7. Astrid Dannenberg & Carlo Gallier, 2019. "The Choice of Institutions to Solve Cooperation Problems: A Survey of Experimental Research," MAGKS Papers on Economics 201911, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Christoph Engel & Svenja Hippel, 2017. "Experimental Social Planners: Good Natured, but Overly Optimistic," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2017_23, Max Planck Institute for Research on Collective Goods.
    9. Liu, Manwei & van der Heijden, Eline, 2019. "Majority rule or dictatorship? The role of collective-choice rules in resolving social dilemmas with endogenous institutions," Other publications TiSEM 78b5d351-486e-425d-a070-2, Tilburg University, School of Economics and Management.

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    Keywords

    Public good; strategy method; experiment; public choice;
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