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Endogenous and costly institutional deterrence in a public good experiment

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  • Kingsley, David C.
  • Brown, Thomas C.

Abstract

Modern societies rely on formal, central authority institutions that regulate the behavior of all members of society. This paper investigates the formation of a central authority regime within a linear public good experiment. The institution is funded by a fixed cost that increases with the level of deterrence, which is specified as the number of group members who are likely to be monitored. The level of deterrence is both exogenously and endogenously determined, allowing investigation of the effect of endogenous selection. The results indicate no significant positive endogenous selection effect. Indeed, in contrast to the existing literature, when a non-deterrent central authority is endogenously determined contributions tend to decrease.

Suggested Citation

  • Kingsley, David C. & Brown, Thomas C., 2016. "Endogenous and costly institutional deterrence in a public good experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 62(C), pages 33-41.
    • Handle: RePEc:eee:soceco:v:62:y:2016:i:c:p:33-41
    DOI: 10.1016/j.socec.2016.03.005
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    2. Alexander Smith & Xi Wen, 2017. "Investing in institutions for cooperation," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(1), pages 75-87, July.

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    More about this item

    Keywords

    Public good experiment; Central authority; Deterrence; Endogenous selection;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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