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The problem of maintaining compliance within stable coalitions: experimental evidence

David McEvoy (), James Murphy (), John Spraggon () and John Stranlund ()

No 2010-02, Working Papers from University of Alaska Anchorage, Department of Economics

Abstract: This study examines the performance of stable cooperative coalitions that form to provide a public good when coalition members have the opportunity to violate their commitments. A stable coalition is one in which no member wishes to leave and no non-member wishes to join. To counteract the incentive to violate their commitments, coalition members fund a third-party enforcer. This leads to the theoretical conclusion that stable coalitions are larger, and provide more of a public good, when their members are responsible for financing enforcement. However, our experiments reveal that member-financed enforcement of compliance reduces the provision of the public good. The decrease is attributed to an increase in the participation threshold for a stable coalition to form and to significant levels of noncompliance. Provision of the public good increases significantly when we abandon the strict stability conditions and require all subjects to join a coalition for it to form.

Keywords: lab experiments; voluntary compliance; international environmental agreements; experimental economics; environmental economics (search for similar items in EconPapers)
JEL-codes: C92 H41 C90 C70 C72 C73 F53 Q50 Q59 (search for similar items in EconPapers)
Date: 2010-01
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Published in Oxford Economic Papers. 63(3):475-498.

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http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA201002.pdf (application/pdf)

Related works:
Journal Article: The problem of maintaining compliance within stable coalitions: experimental evidence (2011) Downloads
Working Paper: The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence (2008) Downloads
Working Paper: The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence (2008) Downloads
Working Paper: The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence (2008) Downloads
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