Download this Paper Open PDF in Browser

Cooperation and Punishment in Public Goods Experiments

Institute for Empirical Research in Economics Working Paper No. 10; CESifo Working Paper Series No. 183

40 Pages Posted: 11 Jan 2000  

Ernst Fehr

University of Zurich - Department of Economics

Simon Gächter

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

Multiple version iconThere are 2 versions of this paper

Date Written: June 1999

Abstract

This paper provides evidence that free riders are heavily punished even if punishment is costly and does not provide any material benefits for the punisher. The more free riders negatively deviate from the group standard the more they are punished. As a consequence, the existence of an opportunity for costly punishment causes a large increase in cooperation levels because potential free riders face a credible threat. We show, in particular, that in the presence of a costly punishment opportunity almost complete cooperation can be achieved and maintained although, under the standard assumptions of rationality and selfishness, there should be no cooperation at all. We also show that free riding causes strong negative emotions among cooperators. The intensity of these emotions is the stronger the more the free riders deviate from the group standard. Our results provide, therefore, support for the hypothesis that emotions are guarantors of credible threats.

JEL Classification: D63, D64, H41, C91, C92

Suggested Citation

Fehr, Ernst and Gächter, Simon, Cooperation and Punishment in Public Goods Experiments (June 1999). Institute for Empirical Research in Economics Working Paper No. 10; CESifo Working Paper Series No. 183. Available at SSRN: https://ssrn.com/abstract=203194

Ernst Fehr (Contact Author)

University of Zurich - Department of Economics ( email )

Blümlisalpstrasse 10
Zuerich, 8006
Switzerland
+41 1 634 3709 (Phone)
+41 1 634 4907 (Fax)

Simon Gächter

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

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

Paper statistics

Downloads
2,406
Rank
4,095
Abstract Views
8,539