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When to leave carrots for sticks: On the evolution of sanctioning institutions in open communities

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  • Chugunova, Marina
  • Luhan, Wolfgang J.
  • Nicklisch, Andreas

Abstract

When asked, people dislike punishment institutions, although punishment is more effective than rewards to maintain cooperation in social dilemmas. Which institution do they choose in the long run? We study migration patterns in a laboratory experiment that allows participants to migrate continuously between punishment and reward communities. The majority of participants initially chooses the reward institution, but a substantial number of subjects joins the less profitable punishment community subsequently. In this case, the mere threat of punishment establishes high contributions. Income differences and missing compensations for cooperators in the reward community are the key factors for the decision to migrate.

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  • Chugunova, Marina & Luhan, Wolfgang J. & Nicklisch, Andreas, 2020. "When to leave carrots for sticks: On the evolution of sanctioning institutions in open communities," Economics Letters, Elsevier, vol. 191(C).
    • Handle: RePEc:eee:ecolet:v:191:y:2020:i:c:s0165176520301233
    DOI: 10.1016/j.econlet.2020.109155
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    Cited by:

    1. Gürdal, Mehmet Y. & Gürerk, Özgür & Yahşi, Mustafa, 2021. "Culture and prevalence of sanctioning institutions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 92(C).

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    More about this item

    Keywords

    Open communities; Voting with feet; Cooperation; Sanctions; Public goods;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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