Abstract
Punishments and rewards are effective means for establishing cooperation in social dilemmas. We compare a setting where actors <span class="italic">individually</span> decide whom to sanction with a setting where sanctions are only implemented when actors <span class="italic">collectively</span> agree that a certain actor should be sanctioned. Collective sanctioning decisions are problematic due to the difficulty of reaching consensus. However, when a decision is made collectively, perverse sanctioning (e.g. punishing high contributors) by individual actors is ruled out. Therefore, collective sanctioning decisions are likely to be in the interest of the whole group. We employ a laboratory experiment where subjects play Public Goods Games with opportunities for punishment or reward that is implemented either by an individual, a majority, or unanimously. For both punishment and reward, contribution levels are higher in the individual than the majority condition, and higher under majority than unanimity. Often, majority agreement or unanimity was not reached on punishments or rewards.
Highlights
A public good is characterized by non-excludability: once it is produced, all actors can enjoy its benefits regardless of their contribution to the provision of the good (Olson 1965 [1971])
We address the effect of the required proportion of consenting actors on contribution levels by comparing contributions under an individual decision rule (IDR) to a collective decision rule (CDR) for which majority and a CDR for which unanimity is required
We compared the effect of individual, majority, and unanimity decision rules for implementing punishment and reward on actors’ ability to enforce cooperation in a Public Goods Game (PGG)
Summary
A public good is characterized by non-excludability: once it is produced, all actors can enjoy its benefits regardless of their contribution to the provision of the good (Olson 1965 [1971]). There is limited experimental research comparing the effect of sanctioning through IDRs and CDRs in public good problems.1 Casari and Luini (2009) find that, compared to an IDR, contributions to public goods are higher when punishment is only carried out if at least two out of four actors punish the fifth member of their group They consider only one CDR, and do not compare positive and negative sanctions. We develop hypotheses about contribution and sanctioning behavior, and on how this behavior of individuals translates in different contribution levels under IDRs and CDRs. Individual-level and macro-level hypotheses are tested in an experiment where individual, majority, and unanimity decision rules for punishing and rewarding are employed in an incentivized manner
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