Obedience to Rules with Mild Sanctions: The Roles of Peer Punishment and Voting

Chen, Josie I (2014): Obedience to Rules with Mild Sanctions: The Roles of Peer Punishment and Voting.

Abstract

Governments sometimes promote rules backed by sanctions too weak to make obedience privately optimal. Factors that may help make such rules effective include the presence of informal sanctions by peers, and implementation through voting. I study the impact of non-deterrent formal sanctions on voluntary contributions to a public good in a laboratory experiment. The effect is studied both in the presence and absence of informal sanctions, under fully exogenous implementation and after both implemented and randomly overridden voting. I find that informal sanctions strengthen the effect of formal ones in most conditions. However, voted implementation has no clear effect on non-deterrent formal sanction in my data, which suggests a reason for caution when studying exogenous implementation by a random vote override procedure.

• Item Type: MPRA Paper
• Language: English
• Keywords: experiment, voluntary contribution, public goods, formal sanctions, informal sanctions, voting, democracy effect
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods

References

Anderson, Lisa and Sarah Stafford, 2003, “Punishment in a Regulatory Setting: Experimental Evidence from the VCM,” Journal of Regulatory Economics 24(1): 91-110.

Andreoni, James, 1988, “Why free ride?: Strategies and learning in public goods experiments.” Journal of Public Economics 37(3): 291-304.

Andreoni, James and Laura Gee, 2011, “The Hired Gun Mechanism,” NBER Working Paper Series, Working Paper 17032

Chaudhuri, Ananish, 2011, “Sustaining Cooperation in Laboratory Public Goods Experiments: A Selective Survey of the Literature,” Experimental Economics 14(1): 47 - 83.

Cinyabuguma, Matthias, Talbot Page, and Louis Putterman, 2005, “Cooperation under the threat of expulsion in a public goods experiment.” Journal of Public Economics 89(8) : 1421-1435.

Dal Bó, Pedro, Andrew Foster and Louis Putterman, 2010, “Institutions and Behavior: Experimental Evidence on the Effects of Democracy,” American Economic Review 100(5): 2205-29.

Ertan, Arhan, Talbot Page, and Louis Putterman, 2009, “Who to punish? Individual decisions and majority rule in mitigating the free rider problem.” European Economic Review 53(5): 495-511.

Fehr, Ernst, and Klaus M. Schmidt, 1999, “A theory of fairness, competition, and cooperation.” Quarterly Journal of Economics 114(3): 817-868.

Fehr, Ernst and Simon Gӓchter, 2000, “Cooperation and Punishment in Public Goods Experiments,” American Economic Review 90: 980 – 994.

Fischbacher, Urs, Simon Gächter, and Ernst Fehr, 2001, “Are People Conditionally Cooperative? Evidence from a Public Goods Experiment,” Economics Letters 71(3): 397-404.

Fischbacher, Urs, 2007, “z-Tree: Zurich Toolbox for Ready-made Economic Experiments,” Experimental Economics 10(2), 171-178.

Fischbacher, Urs, and Simon Gӓchter. 2010. “Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments.” American Economic Review, 100(1): 541-56.

Gächter, Simon and Benedikt Herrmann, 2008, “Reciprocity, Culture and Human Cooperation: Previous Insights and a New Cross-Cultural Experiment,” Philosophical Transactions of the Royal Society B doi:10.1098/rstb.2008.0275.

Greiner, Ben, 2004, “The Online Recruitment System ORSEE 2.0 - A Guide for the Organization of Experiments in Economics,” University of Cologne, Working Paper Series in Economics 10.

Kamei, Kenju, Louis Putterman, and Jean-Robert Tyran, forthcoming, “State or nature? Formal vs. informal sanctioning in the voluntary provision of public goods.” conditionally accepted at Experimental Economics.

Kube, Sebastian and Christian Traxler, 2011, “The Interaction of Legal and Social Norm Enforcement,” Journal of Public Economic Theory 13(5): 639-660.

Markussen, Thomas, Louis Putterman, and Jean-Robert Tyran, 2014, “Self-Organization for Collective Action: An Experimental Study of Voting on Sanction Regimes.” The Review of Economic Studies 81(1): 301-324.

Nikiforakis, Nikos and Hans-Theo Normann, 2008, “A Comparative Statics Analysis of Punishment in Public Goods Experiments,” Experimental Economics 11(4): 358-369.

Ӧnes, Umut and Louis Putterman, 2007, “The Ecology of Collective Action: A Public Goods and Sanctions Experiment with Controlled Group Formation,” Journal of Economic Behavior and Organization 62: 495 – 521.

Ostrom, Elinor, James Walker and Roy Gardner, 1992, “Covenants with and without a Sword: Self-governance is Possible,” American Political Science Review 86 (2): 404 – 17.

Putterman, Louis, Jean-Robert Tyran, and Kenju Kamei, 2011, “Public goods and voting on formal sanction schemes.” Journal of Public Economics 95(9): 1213-1222.

Torgler, Benno, 2002, “Speaking to Theorists and Searching for Facts: Tax Morale and Tax Compliance in Experiments,” Journal of Economic Surveys 16 (5): 657-83.

Tyran, Jean‐Robert, and Lars P. Feld, 2006, “Achieving Compliance when Legal Sanctions are Non‐deterrent.” The Scandinavian Journal of Economics 108(1): 135-156.

Yamagishi, Toshio, 1986, “The Provision of a Sanctioning System as a Public Good,” Journal of Personality and Social Psychology 51 (1): 110 – 16.

Zelmer, Jennifer. “Linear public goods experiments: A meta-analysis.” Experimental Economics 6.3 (2003): 299-310.