Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?

Nikos Nikiforakis ()

No 04/05, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London

Abstract: Recent public goods experiments have shown that free riding can be curtailed through mutual monitoring and sanctioning between members of a group. However, often we can not allow for punishment and exclude the possibility of counter-punishment occurring. We design a public goods experiment, where we allow for both punishment and counter-punishment. We find that in both partner and stranger treatments cooperation declines over time. The reason is that people are less willing to punish under the threat of counter-punishment. Participants squander their endowment in costly confrontations leading to a relative payoff loss, in comparison to a treatment without punishments.

Keywords: public goods; punishment; counter-punishment; mutual monitoring; free-riding; experiments (search for similar items in EconPapers)
JEL-codes: C91 C92 D64 H41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2004-04, Revised 2004-04
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-pbe and nep-reg
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