Do Non-Strategic Sanctions Obey the Law of Demand? The Demand for Punishment in the Voluntary Contribution Mechanism

Brown University Economics Working Paper No. 03-15

30 Pages Posted: 30 Aug 2003

See all articles by Christopher M. Anderson

Christopher M. Anderson

University of Rhode Island - Department of Environmental and Natural Resource Economics

Louis Putterman

Brown University - Department of Economics

Date Written: April 2003

Abstract

The prospect of receiving a monetary sanction for free riding has been shown to increase contributions to public goods. We ask whether the impulse to punish is unresponsive to the cost to the punisher, or whether, like other preferences, it interacts with prices to generate a conventional demand curve. We test the price responsiveness of the demand for punishment by randomly varying the cost of reducing the earnings of other group members following laboratory voluntary contribution decisions. In our design, new groups are formed after each interaction and no subject faces any other more than once, so there is no strategic reason to punish. We nonetheless find significant levels of punishment, and we learn that both price and the extent to which the recipient's contribution is below the group mean are significant determinants of the quantity of punishment demanded. Moreover, punishment is mainly directed at free riders even when it costs nothing to the punisher. However, the propensity to punish egregious free riding varies considerably within our subject pool, from non-punishers to aggressive punishers.

Keywords: Public goods, collective action, experiment, punishment, demand

JEL Classification: C91, H41, D71

Suggested Citation

Anderson, Christopher M. and Putterman, Louis G., Do Non-Strategic Sanctions Obey the Law of Demand? The Demand for Punishment in the Voluntary Contribution Mechanism (April 2003). Brown University Economics Working Paper No. 03-15. Available at SSRN: https://ssrn.com/abstract=428180 or http://dx.doi.org/10.2139/ssrn.428180

Christopher M. Anderson

University of Rhode Island - Department of Environmental and Natural Resource Economics ( email )

213 Kingston Coastal Institute
One Greenhouse Road
Kingston, RI 02881
United States

Louis G. Putterman (Contact Author)

Brown University - Department of Economics ( email )

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

Register to save articles to
your library

Register

Paper statistics

Downloads
72
Abstract Views
1,369
rank
320,147
PlumX Metrics