Governing Collective Action in the Face of Observational Error

64 Pages Posted: 18 Aug 2017

See all articles by Bravo Center Working Paper Series

Bravo Center Working Paper Series

Brown University - Department of Economics

Thomas Markussen

University of Copenhagen - Department of Economics

Louis Putterman

Brown University - Department of Economics

Date Written: August 2017

Abstract

We present results from a repeated public goods experiment where subjects choose by vote one of two sanctioning schemes: peer-to-peer (informal) or centralized (formal). We introduce, in some treatments, a moderate amount of noise (a 10 percent probability that a contribution is reported incorrectly) affecting either one or both sanctioning environments. We find that the institution with more accurate information is always by far the most popular, but noisy information undermines the popularity of peer-to-peer sanctions more strongly than that of centralized sanctions. This may contribute to explaining the greater reliance on centralized sanctioning institutions in complex environments.

Keywords: Public goods, sanctions, information, institution, voting

JEL Classification: H41, C92, D02

Suggested Citation

Working Paper Series, Bravo Center and Markussen, Thomas and Putterman, Louis G., Governing Collective Action in the Face of Observational Error (August 2017). Available at SSRN: https://ssrn.com/abstract=3019405 or http://dx.doi.org/10.2139/ssrn.3019405

Bravo Center Working Paper Series (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

Thomas Markussen

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Louis G. Putterman

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-3837 (Phone)
401-863-1970 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
28
Abstract Views
443
PlumX Metrics