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

Kamei, K.; Putterman, L.; Tyran, J.R.

doi:10.1007/s10683-014-9405-0

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

Kamei, K.; Putterman, L.; Tyran, J.R.

Authors

K. Kamei

L. Putterman

J.R. 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.

Citation

Kamei, K., Putterman, L., & Tyran, J. (2015). State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods. Experimental Economics, 18(1), 38-65. https://doi.org/10.1007/s10683-014-9405-0

Journal Article Type	Article
Acceptance Date	May 6, 2014
Online Publication Date	Jun 5, 2014
Publication Date	Mar 1, 2015
Deposit Date	Sep 19, 2016
Publicly Available Date	Sep 19, 2016
Journal	Experimental Economics
Print ISSN	1386-4157
Electronic ISSN	1573-6938
Publisher	Springer
Peer Reviewed	Peer Reviewed
Volume	18
Issue	1
Pages	38-65
DOI	https://doi.org/10.1007/s10683-014-9405-0
Public URL	https://durham-repository.worktribe.com/output/1376414