State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods

Kenju Kamei, Louis Putterman and Jean-Robert Tyran

Experimental Economics, 2015, vol. 18, issue 1, 38-65

Abstract: We investigate the endogenous formation of sanctioning institutions supposed to improve efficiency in the voluntary provision of public goods. Our paper parallels Markussen et al. (Rev Econ Stud 81:301–324, 2014 ) in that our experimental subjects vote over formal versus informal sanctions, but it goes beyond that paper by endogenizing the formal sanction scheme. We find that self-determined formal sanctions schemes are popular and efficient when they carry no up-front cost, but as in Markussen et al. informal sanctions are more popular and efficient than formal sanctions when adopting the latter entails such a cost. Practice improves the performance of sanction schemes: they become more targeted and deterrent with learning. Voters’ characteristics, including their tendency to engage in perverse informal sanctioning, help to predict individual voting. Copyright Economic Science Association 2015

Keywords: Sanction; Social dilemma; Public goods; Voluntary contribution mechanism; Punishment; Experiment; C92; C91; D03; D71; H41 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (75)

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DOI: 10.1007/s10683-014-9405-0

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