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�Expressive� Obligations in Public Good Games: Crowding-in and Crowding-out Effects

Author

Listed:
  • Michele Bernasconi

    (Department of Economics, University Of Venice C� Foscari)

  • Luca Corazzini

    (Dipartimento di Scienze Economiche, Universit� di Padova.)

  • Anna Marenzi

    (Dipartimento di Economia, Universit� dell'Insubria.)

Abstract

We study individual behaviour in a repeated linear public good experiment in which, in each period, subjects are required to contribute a minimum level and face a certain probability to be audited. Audited subjects who contribute less than the minimum level are convicted to pay the difference between the obligation required and the voluntary contribution. We study the �expressive� power of the obligations. While at early stages subjects contribute the minimum level, with repetition contributions decline below the required amount indicating that expressive obligations are not capable to sustain cooperation. We observe that expressive obligations exert a rather robust crowding-out effect on voluntary contributions as compared to a standard public good game. The crowding-out is stronger when payments collected by the monitoring activity are distributed to subjects rather than when they are pure dead-weight-loss.

Suggested Citation

  • Michele Bernasconi & Luca Corazzini & Anna Marenzi, 2010. "�Expressive� Obligations in Public Good Games: Crowding-in and Crowding-out Effects," Working Papers 2010_04, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2010_04
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    2. Matteo Rizzolli & Luca Stanca, 2012. "Judicial Errors and Crime Deterrence: Theory and Experimental Evidence," Journal of Law and Economics, University of Chicago Press, vol. 55(2), pages 311-338.
    3. Bernasconi, Michele & Corazzini, Luca & Marenzi, Anna, 2013. "‘Expressive’ obligations in public good games: Crowding-in and crowding-out effects," Research in Economics, Elsevier, vol. 67(1), pages 13-24.
    4. Luca Corazzini, Marcelo Tyszler, 2010. "Love for Efficiency or Confusion? A QRE Analysis of Individual Contributions in a Public Good Game," ISLA Working Papers 37, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy.
    5. Christoph Engel & Michael Kurschilgen, 2011. "The Coevolution of Behavior and Normative Expectations. Customary Law in the Lab," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_32, Max Planck Institute for Research on Collective Goods.
    6. Theodore Eisenberg & Christoph Engel, 2012. "Assuring Adequate Deterrence in Tort: A Public Good Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2012_07, Max Planck Institute for Research on Collective Goods.

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    More about this item

    Keywords

    Expressive law; motivation crowding theory; laboratory experiments;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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