State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods
- Author(s)
- Kenju Kamei, Louis Putterman, Jean-Robert Tyran
- 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.
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- Durham University, Brown University
- Journal
- Experimental Economics
- Volume
- 18
- Pages
- 38 - 65
- No. of pages
- 28
- ISSN
- 1386-4157
- DOI
- https://doi.org/10.1007/s10683-014-9405-0
- Publication date
- 03-2015
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502045 Behavioural economics, 502021 Microeconomics
- Keywords
- ASJC Scopus subject areas
- Economics, Econometrics and Finance (miscellaneous)
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/state-or-nature-endogenous-formal-versus-informal-sanctions-in-the-voluntary-provision-of-public-goods(8644ed53-a1d6-4b65-a6bd-575c6e3ed86b).html