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An individualistic approach to institution formation in public good games

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  • Ramalingam, Abhijit
  • Godoy, Sara
  • Morales, Antonio J.
  • Walker, James M.

Abstract

In a repeated public goods setting, we explore whether individuals, acting unilaterally, will provide an effective sanctioning institution. Subjects first choose independently whether they will participate in a sanctioning stage that follows a contribution stage. Only those who gave themselves the “right” to sanction can do so. We find that the effectiveness of the institution may not require provision of the institution at the level of the group. Individuals acting unilaterally are able to provide sanctioning institutions that effectively raise cooperation. The effectiveness of the institution, however, depends on whether the “right” to sanction entails a monetary cost or not.

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  • Ramalingam, Abhijit & Godoy, Sara & Morales, Antonio J. & Walker, James M., 2016. "An individualistic approach to institution formation in public good games," Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 18-36.
    • Handle: RePEc:eee:jeborg:v:129:y:2016:i:c:p:18-36
    DOI: 10.1016/j.jebo.2016.06.003
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    2. Liu, Manwei & van der Heijden, Eline, 2019. "Majority rule or dictatorship? The role of collective-choice rules in resolving social dilemmas with endogenous institutions," Discussion Paper 2019-011, Tilburg University, Center for Economic Research.
    3. Kopányi-Peuker, Anita & Offerman, Theo & Sloof, Randolph, 2017. "Fostering cooperation through the enhancement of own vulnerability," Games and Economic Behavior, Elsevier, vol. 101(C), pages 273-290.
    4. DeAngelo, Gregory & Gee, Laura Katherine, 2018. "Peers or Police? Detection and Sanctions in the Provision of Public Goods," IZA Discussion Papers 11540, Institute of Labor Economics (IZA).
    5. Altemeyer-Bartscher, Martin & Bershadskyy, Dmitri & Schreck, Philipp & Timme, Florian, 2017. "Endogenous institution formation in public good games: The effect of economic education," IWH Discussion Papers 29/2017, Halle Institute for Economic Research (IWH).
    6. Abhijit Ramalingam & Antonio J. Morales & James M. Walker, 2016. "Variation in experimental instructions: Punishment in public goods games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-22R, School of Economics, University of East Anglia, Norwich, UK..
    7. DeAngelo, Gregory & Gee, Laura K., 2020. "Peers or police?: The effect of choice and type of monitoring in the provision of public goods," Games and Economic Behavior, Elsevier, vol. 123(C), pages 210-227.
    8. Nicklisch, Andreas & Putterman, Louis & Thöni, Christian, 2021. "Trigger-happy or precisionist? On demand for monitoring in peer-based public goods provision," Journal of Public Economics, Elsevier, vol. 200(C).
    9. Ramalingam, Abhijit & Morales, Antonio J. & Walker, James M., 2018. "Varying experimental instructions to improve comprehension: Punishment in public goods games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 66-73.
    10. Liu, Manwei & van der Heijden, Eline, 2019. "Majority rule or dictatorship? The role of collective-choice rules in resolving social dilemmas with endogenous institutions," Other publications TiSEM 78b5d351-486e-425d-a070-2, Tilburg University, School of Economics and Management.
    11. Abhijit Ramalingam & Antonio J. Morales & James M. Walker, 2018. "Peer Punishment in Repeated Isomorphic Give and Take Social Dilemmas," Working Papers 18-15, Department of Economics, Appalachian State University.
    12. Alt, Marius, 2024. "Better us later than me now —," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).

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    More about this item

    Keywords

    Public goods; Experiment; Punishment; Institution formation; Unilateral provision; Cooperation;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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