Judicial error and cooperation
- Author(s)
- Thomas Markussen, Louis Putterman, Jean-Robert Tyran
- Abstract
Cooperation can be induced by an authority with the power to mete out sanctions for free riders, but law enforcement is prone to error. This paper experimentally analyzes preferences for and consequences of errors in formal sanctions against free riders in a public goods game. With type I errors, even full contributors to the public good may be punished. With type II errors, free riders may go unpunished. We find that judicial error undermines cooperation and that the effects of type I and II errors are symmetric. To investigate their relative (dis-)like for error, we let subjects choose what type of error to prevent. We find that subjects prefer type II over type I errors. However, the strength of preferences for preventing type I errors is fully in line with a motive to maximize income and does not indicate any additional psychological or fairness bias against type I errors.
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- University of Copenhagen, Brown University
- Journal
- European Economic Review
- Volume
- 89
- Pages
- 372–388
- No. of pages
- 17
- ISSN
- 0014-2921
- DOI
- https://doi.org/10.1016/j.euroecorev.2016.08.004
- Publication date
- 10-2016
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502045 Behavioural economics, 502010 Public finance
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Finance
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/judicial-error-and-cooperation(99340462-3554-476d-8c5e-9234e0a63d68).html