Imperfect Public Monitoring with Costly Punishment: An Experimental Study
American Economic Review
vol. 102,
no. 7, December 2012
(pp. 3317-32)
Abstract
This paper experimentally investigates the effects of a costly punishment option on cooperation and social welfare in long, finitely repeated public good contribution games. In a perfect monitoring environment, increasing the severity of the potential punishment monotonically increases average net payoffs. In a more realistic imperfect monitoring environment, we find a U-shaped relationship. Access to a standard punishment technology in this setting significantly decreases net payoffs, even in the long run. Access to a severe punishment technology leads to roughly the same payoffs as with no punishment option, as the benefits of increased cooperation offset the social costs of punishing. (JEL C92, H41, K42)Citation
Ambrus, Attila, and Ben Greiner. 2012. "Imperfect Public Monitoring with Costly Punishment: An Experimental Study." American Economic Review, 102 (7): 3317-32. DOI: 10.1257/aer.102.7.3317Additional Materials
JEL Classification
- C92 Design of Experiments: Laboratory, Group Behavior
- H41 Public Goods
- K42 Illegal Behavior and the Enforcement of Law