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Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help

Sven Fischer (), Kristoffel Grechenig () and Nicolas Meier ()
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Sven Fischer: Max Planck Institute for Research on Collective Goods, Bonn
Kristoffel Grechenig: Max Planck Institute for Research on Collective Goods, Bonn

No 2013_06, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: We run several experiments which allow us to compare cooperation under perfect and imperfect information and under a centralized and decentralized punishment regime. We nd that (1) centralization by itself does not improve cooperation and welfare compared to an informal, peer-to-peer punishment regime and (2) centralized punishment is equally sensitive to noise as decentralized punishment, that is, it leads to signi cantly lower cooperation and welfare (total pro ts). Our results shed critical light on the widespread conjecture that the centralization of punishment institutions is welfare increasing in itself.

Keywords: Public Goods; cooperation; centralized punishment; imperfect information; decentralized punishment; peer to peer punishment (search for similar items in EconPapers)
JEL-codes: C92 K42 H42 D03 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-cta, nep-evo and nep-exp
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