Work

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

Year: 2014

Type: article

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.

Source: Experimental Economics

DOI: 10.1007/s10683-014-9405-0

Authors: Kenju Kamei, Louis Putterman, Jean-Robert Tyran

Institutions: Bowling Green State University, Brown University, University of Copenhagen, University of Vienna

Language: English

Topic: Experimental Behavioral Economics Studies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

Funder: Austrian Science Fund