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Lying in public good games with and without punishment

Bernd Irlenbusch and Janna Ter Meer
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Bernd Irlenbusch: University of Cologne
Janna Ter Meer: University of Cologne

No 06-02, Cologne Graduate School Working Paper Series from Cologne Graduate School in Management, Economics and Social Sciences

Abstract: We experimentally study a frequently observed public good setting where accurate contribution feedback is not available and group members can send non-verifiable cheap talk messages about their contributions. As feedback, subjects receive only announced contributions or the announced or actual contribution with 50% probability. In this setting, we explore both information transmission and reception as well as the effectiveness of costly peer punishment. Overall, we find that cooperation breaks down in all announcement treatments except when actual contribution feedback is provided some of the time and punishment is available. We identify various constraints to full cooperation relative to the standard public good game. First, subjects make errors in adjusting their beliefs for the announcements of others and, on average, adjust their beliefs downward for a given announcement. Second, we find that significantly more punishment is assigned to high contributors compared to the standard public good game. Furthermore, punishment for low contributors appears to have a smaller disciplining effect. When actual contribution information is provided some of the time we find that these constraints are less severe compared to the setting where only announcements are available.

Keywords: public goods; punishment; lying; credibility; communication (search for similar items in EconPapers)
JEL-codes: C92 D03 H41 D02 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-gth, nep-hpe and nep-soc
Date: 2015-05-21
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