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State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods

Published online by Cambridge University Press:  14 March 2025

Kenju Kamei ,
Louis Putterman  and
Jean-Robert Tyran
Kenju Kamei
Affiliation:
Bowling Green State University, Bowling Green, OH, USA
Louis Putterman*
Affiliation:
Department of Economics, Box B, Brown University, Providence, RI 02912, USA
Jean-Robert Tyran
Affiliation:
University of Vienna, Vienna, Austria University of Copenhagen, Copenhagen, Denmark
*
Louis_Putterman@Brown.Edu
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Abstract

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.

Keywords

SanctionSocial dilemmaPublic goodsVoluntary contribution mechanismPunishmentExperiment

JEL classification

H41: Public Goods C91: Laboratory, Individual Behavior C92: Laboratory, Group Behavior D71: Social Choice • Clubs • Committees • Associations
Type
Original Paper
Information
Experimental Economics , Volume 18 , Issue 1: Special Issue In Honor of Elinor “Lin” Ostrom , March 2015 , pp. 38 - 65
Copyright
Copyright © 2014 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-014-9405-0) contains supplementary material, which is available to authorized users.

We wish to thank the Danish research council (FSE) and the Austrian Science Fund (FWF project no. S10307-G16) for financial support. We are grateful to two anonymous referees for their detailed comments and suggestions, and we likewise thank participants at the Economic Science Association meeting in July, 2010 in Copenhagen, XVIth IEA World Congress in July, 2011 in Beijing and at workshops at Brown University and George Mason University for their helpful comments.

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Supplementary material: File

Kamei et al. supplementary material

Appendix to Kamei, Putterman and Tyran, 2012 “State or Nature? Formal vs. Informal Sanctioning in the Voluntary Provision of Public Goods”
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