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Endogenous choice of institutional punishment mechanisms to promote social cooperation
Department of Economics, Management, Industrial Engineering and Tourism, Research Unit on Governance, Competitiveness, and Public Policy (GOVCOPP), University of Aveiro, Aveiro, Portugal.
Department of Risk Management and Insurance and Center for the Economic Analysis of Risk, Georgia State University, Atlanta, USA; School of Economics, University of Cape Town, Cape Town, South Africa.
NIPE, Centre for Research in Economics and Management, University of Minho, Braga, Portugal.ORCID iD: 0000-0001-7089-2663
School of Society, Politics and Ethics, University College Cork, Cork, Ireland; School of Economics, University of Cape Town, Cape Town, South Africa; School of Business, Örebro University, Örebro, Sweden.
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2022 (English)In: Public Choice, ISSN 0048-5829, E-ISSN 1573-7101, Vol. 191, no 3-4, p. 309-335Article in journal (Refereed) Published
Abstract [en]

Does the desirability of social institutions for public goods provision depend on the extent to which they include mechanisms for endogenous enforcement of cooperative behavior? We consider alternative institutions that vary the use of direct punishments to promote social cooperation. In one institution, subjects participate in a public goods experiment in which an initial stage of voluntary contribution is followed by a second stage of voluntary, costly sanctioning. Another institution consists of the voluntary contribution stage only, with no subsequent opportunity to sanction. In a third stage subjects vote for which institution they prefer for future interactions: do they prefer one that does allow sanctions or one that does not allow sanctions? Our results show that even though sanctions are frequently used when available, the clear majority of individuals vote for the institution that does not allow sanctions. Thus, a distinction is required between the principles that guide the choice of institutions and the principles that apply to actions guided by institutions. Our results indicate that it is the wealth generated by the institution that determines its desirability.

Place, publisher, year, edition, pages
Springer, 2022. Vol. 191, no 3-4, p. 309-335
Keywords [en]
Public goods, Social institutions, Voting, Sanctions, Laboratory experiments
National Category
Economics
Identifiers
URN: urn:nbn:se:oru:diva-88878DOI: 10.1007/s11127-020-00868-5ISI: 000604480300002Scopus ID: 2-s2.0-85098650839OAI: oai:DiVA.org:oru-88878DiVA, id: diva2:1521821
Note

Funding Agencies:

National Science Foundation (NSF)NSF/IIS 9817518 NSF/HSD 0527675 NSF/SES 0616746

Portuguese Foundation for Science and Technology SFRH/BSAB/489/2005 SFRH/BSAB/491/2005

Portuguese Foundation for Science and Technology UID/ECO/03182/2019

Available from: 2021-01-25 Created: 2021-01-25 Last updated: 2022-06-14Bibliographically approved

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Rutström, Elisabet

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