Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations

37 Pages Posted: 24 Aug 2011

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

Multiple version iconThere are 3 versions of this paper

Date Written: July 1, 2011

Abstract

We investigate the emergence and enforcement of contribution norms to public goods in homogeneous and heterogeneous groups. With survey data we demonstrate that uninvolved individuals hold well defined yet conflicting normative ideas of fair contribution rules related to efficiency, equality, and equity. In the experiment, in the absence of punishment no contribution norm is observed and all groups converge towards free-riding. With punishment, strong and stable differences in contributions emerge across group types and individuals in different roles. In some cases these differences result from the emergence of an absolute efficiency norm where all fully contribute. In the cases where full efficiency is not attained, these differences result from the enforcement of different relative contribution norms. Our experimental data show that individuals often agree on and enforce a contribution norm even when it entails pronounced differences in earnings.

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

JEL Classification: H41, C92, D63

Suggested Citation

Reuben, Ernesto and Riedl, Arno M., Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations (July 1, 2011). Columbia Business School Research Paper, Available at SSRN: https://ssrn.com/abstract=1915464 or http://dx.doi.org/10.2139/ssrn.1915464

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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