Experimental Economics

, Volume 18, Issue 1, pp 38–65 | Cite as

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

Original Paper

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.

Keywords

Sanction Social dilemma Public goods Voluntary contribution mechanism Punishment Experiment 

JEL Classification

C92 C91 D03 D71 H41 

Supplementary material

10683_2014_9405_MOESM1_ESM.pdf (2.4 mb)
Supplementary material 1 (PDF 2494 kb)

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Copyright information

© Economic Science Association 2014

Authors and Affiliations

  • Kenju Kamei
    • 1
  • Louis Putterman
    • 2
  • Jean-Robert Tyran
    • 3
    • 4
  1. 1.Bowling Green State UniversityBowling GreenUSA
  2. 2.Department of Economics, Box BBrown UniversityProvidenceUSA
  3. 3.University of ViennaViennaAustria
  4. 4.University of CopenhagenCopenhagenDenmark

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