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A comparative statics analysis of punishment in public-good experiments

Published online by Cambridge University Press:  14 March 2025

Nikos Nikiforakis  and
Hans-Theo Normann
Nikos Nikiforakis*
Affiliation:
Department of Economics, The University of Melbourne, Melbourne, Victoria 3010, Australia
Hans-Theo Normann*
Affiliation:
Department of Economics, Royal Holloway, University of London, Egham, Surrey, TW20 0EX, UK
*
e-mail: [email protected]
e-mail: [email protected]
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Abstract

This paper provides a comparative-statics analysis of punishment in public-good experiments. We vary the effectiveness of punishment, that is, the factor by which punishment reduces the punished player's income. The data show that contributions increase monotonically in punishment effectiveness. High effectiveness leads to near complete cooperation and welfare improvements. Below a certain threshold, however, punishment cannot prevent the decay of cooperation. In these cases, punishment opportunities reduce welfare. The results suggest that the experimenter's choice of the punishment effectiveness is of great importance for the experimental outcome.

Keywords

Decentralized punishmentPunishment effectivenessPublic goodWelfare

JEL classification

H41: Public Goods D70: General C92: Laboratory, Group Behavior
Type
Research Article
Information
Experimental Economics , Volume 11 , Issue 4 , December 2008 , pp. 358 - 369
Copyright
Copyright © 2007 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (http://dx.doi.org/10.1007/s10683-007-9171-3) contains supplementary material, which is available to authorized users.

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