Paying to punish on a free ride: member and nonmember punishments in voluntary coalitions

David McEvoy ()

Applied Economics Letters, 2012, vol. 19, issue 3, 285-288

Abstract: We explore public good experiments in which players have the opportunity to form cooperative coalitions. The decision to join a coalition is voluntary as is a member's decision to comply with the terms of the coalition. An informal enforcement mechanism is examined in which coalition members and nonmembers can impose costly punishments on one another. We find that when punishments are purely voluntary, coalition members and free-riding nonmembers are equally likely to punish noncompliant coalition members. Moreover, the extent to which nonmembers punish noncompliance does not change regardless of whether the members can credibly enforce compliance within their coalition.

Date: 2012
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DOI: 10.1080/13504851.2011.572844

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