Competition, Cooperation, and Collective Choice

52 Pages Posted: 2 Aug 2012

See all articles by Thomas Markussen

Thomas Markussen

University of Copenhagen - Department of Economics

Ernesto Reuben

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

Jean-Robert Tyran

University of Vienna; University of Copenhagen - Department of Economics; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: May 1, 2012

Abstract

The ability of groups to implement efficiency-enhancing institutions is emerging as a central theme of research in economics. This paper explores voting on a scheme of intergroup competition which facilitates cooperation in a social dilemma situation. Experimental results show that the competitive scheme fosters cooperation. Competition is popular but the electoral outcome depends strongly on specific voting rules of institutional choice. If the majority decides, competition is almost always adopted. If likely losers from competition have veto power, it is often not, and substantial gains in efficiency are foregone.

Keywords: public goods, competition, tournament, cooperation, voting

JEL Classification: D72, J33, H41

Suggested Citation

Markussen, Thomas and Reuben, Ernesto and Tyran, Jean-Robert, Competition, Cooperation, and Collective Choice (May 1, 2012). Univ. of Copenhagen Dept. of Economics Discussion Paper No. 12-04, Columbia Business School Research Paper No. 12/43, Available at SSRN: https://ssrn.com/abstract=2121436 or http://dx.doi.org/10.2139/ssrn.2121436

Thomas Markussen

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Ernesto Reuben

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

Jean-Robert Tyran (Contact Author)

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, Vienna 1090
Austria

HOME PAGE: http://homepage.univie.ac.at/jean-robert.tyran/

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 353 23 027 (Phone)

HOME PAGE: http://www.econ.ku.dk/tyran/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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