Punishing the weakest link - Voluntary sanctions and efficient coordination in the minimum effort game

Fabrice Le Lec, Astrid Matthey () and Ondřej Rydval ()
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Astrid Matthey: German Environment Agency, and Max Planck Institute of Economics
Ondřej Rydval: CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Theory and Decision, 2023, vol. 95, issue 3, No 4, 429-456

Abstract: Abstract Using a laboratory experiment, we examine whether voluntary sanctions induce subjects to coordinate more efficiently in a repeated minimum-effort game. While most groups first experience Pareto inferior coordination in a baseline treatment, the level of effort increases substantially once ex post sanctioning opportunities are introduced, that is, when one can assign costly punishment points to other group members to reduce their payoffs. We compare the effect of this voluntary punishment possibility with the effect of ex post costless communication, which in contrast to the punishment treatment increases efforts only temporarily and fails to bring the players to higher payoff equilibria permanently. Our results indicate that decentralized sanctions can play an important role as a coordination device in Pareto-ranked coordination settings. They also suggest that the motivations behind voluntary sanctions may be more general than usually put forth in the literature on cooperation games.

Keywords: Coordination; Minimum effort; Order-statistic game; Punishment; Sanction; Weakest link; C72; C91; D01; D90 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11238-023-09931-1

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