The Hired Gun Mechanism
James Andreoni () and
Laura Gee ()
No 17032, NBER Working Papers from National Bureau of Economic Research, Inc
We present and experimentally test a mechanism that provides a simple, natural, low cost, and realistic solution to the problem of compliance with socially determined efficient actions, such as contributing to a public good. We note that small self-governing organizations often place enforcement in the hands of an appointed leader-the department chair, the building superintendent, the team captain. This hired gun, we show, need only punish the least compliant group member, and then only punish this person enough so that the person would have rather been the second least compliant. We show experimentally this mechanism, despite having very small penalties out of equilibrium, reaches the full compliance equilibrium almost instantly.
JEL-codes: C72 C91 C92 D7 H41 (search for similar items in EconPapers)
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