Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations

27 Pages Posted: 28 Jul 2009

See all articles by Ernesto Reuben

Ernesto Reuben

New York University (NYU) - New York University, Abu Dhabi; IZA Institute of Labor Economics

Arno Riedl

Maastricht University; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Netspar

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Abstract

Economic and social interaction takes place between individuals with heterogeneous characteristics. We investigate experimentally the emergence and informal enforcement of different contribution norms to a public good in homogeneous and different heterogeneous groups. When punishment is not allowed all groups converge towards free-riding. With punishment, contributions increase and differ distinctly across groups and individuals with different induced characteristics. We show econometrically that these differences are not accidental but enforced by punishment. The enforced contribution norms are related to fairness ideas of equity regarding contribution possibilities but not regarding earnings. Individuals with different characteristics tacitly agree on the norm to be enforced, even if this leads to large payoff differences. Our results also emphasize the role of details of the environment that may alter focal contribution norms in an important way.

Keywords: public good, heterogeneous groups, punishment, cooperation, social norms, norm enforcement

JEL Classification: H41, C92, Z13

Suggested Citation

Reuben, Ernesto and Riedl, Arno M., Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations. IZA Discussion Paper No. 4303, Available at SSRN: https://ssrn.com/abstract=1439156 or http://dx.doi.org/10.2139/ssrn.1439156

Ernesto Reuben (Contact Author)

New York University (NYU) - New York University, Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Arno M. Riedl

Maastricht University ( email )

Department of Microeconomics & Public Economics
P.O. Box 616
Maastricht, 6200 MD
Netherlands

HOME PAGE: http://www.arnoriedl.com

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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