State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods

Kenju Kamei, Louis Putterman, Jean Robert Tyran

Research output: Contribution to journalArticlepeer-review

45 Citations (Scopus)

Abstract

We investigate the endogenous formation of sanctioning institutions supposed to improve efficiency in the voluntary provision of public goods. Our paper parallels Markussen et al. (Rev Econ Stud 81:301–324, 2014) in that our experimental subjects vote over formal versus informal sanctions, but it goes beyond that paper by endogenizing the formal sanction scheme. We find that self-determined formal sanctions schemes are popular and efficient when they carry no up-front cost, but as in Markussen et al. informal sanctions are more popular and efficient than formal sanctions when adopting the latter entails such a cost. Practice improves the performance of sanction schemes: they become more targeted and deterrent with learning. Voters’ characteristics, including their tendency to engage in perverse informal sanctioning, help to predict individual voting.

Original languageEnglish
Pages (from-to)38-65
Number of pages28
JournalExperimental Economics
Volume18
Issue number1
DOIs
Publication statusPublished - 2015 Mar
Externally publishedYes

Keywords

  • Experiment
  • Public goods
  • Punishment
  • Sanction
  • Social dilemma
  • Voluntary contribution mechanism

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

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