Imperfect public monitoring with costly punishment - An experimental study

Attila Ambrus () and Ben Greiner
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Attila Ambrus: Department of Economics, Harvard University

No 2011-10, Discussion Papers from School of Economics, The University of New South Wales

Abstract: This paper experimentally investigates the effects of a costly punishment option on cooperation and social welfare in long finitely repeated public good contribution games. In a perfect monitoring environment increasing the severity of the potential punishment monotonically increases both contributions and the average net payoffs of subjects. In a more realistic imperfect monitoring environment, we find a U-shaped relationship between the severity of punishment and average net payoffs. Access to a standard punishment technology in this setting significantly decreases net payoffs, even in the long run. Access to a very severe punishment technology leads to roughly the same payoffs as with no punishment option, as the benefits of increased cooperation offset the social costs of punishing.

Keywords: public good contribution experiments; imperfect monitoring; welfare implications of costly punishment (search for similar items in EconPapers)
JEL-codes: C72 C92 H41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-08
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Imperfect Public Monitoring with Costly Punishment: An Experimental Study (2012)
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