Imperfect Public Monitoring with Costly Punishment: An Experimental Study

Attila Ambrus and Ben Greiner

American Economic Review, 2012, vol. 102, issue 7, 3317-32

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 average net payoffs. In a more realistic imperfect monitoring environment, we find a U-shaped relationship. Access to a standard punishment technology in this setting significantly decreases net payoffs, even in the long run. Access to a 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. (JEL C92, H41, K42)

JEL-codes: C92 H41 K42 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/aer.102.7.3317
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Citations: View citations in EconPapers (111)

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Working Paper: Imperfect public monitoring with costly punishment - An experimental study (2011)
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