State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods
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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.
Originalsprog | Engelsk |
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Tidsskrift | Experimental Economics |
Vol/bind | 18 |
Udgave nummer | 1 |
Sider (fra-til) | 38-65 |
Antal sider | 28 |
ISSN | 1386-4157 |
DOI | |
Status | Udgivet - 2015 |
ID: 128680929