A Comparative Statics Analysis of Punishment in Public-Good Experiments

21 Pages Posted: 24 Jun 2005

See all articles by Nikos Nikiforakis

Nikos Nikiforakis

New York University (NYU) - New York University Abu Dhabi

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics; Max Planck Institute for Research on Collective Goods

Multiple version iconThere are 2 versions of this paper

Date Written: June 17, 2005

Abstract

This paper provides a comparative statics analysis of punishment in public-good experiments. We vary systematically the effectiveness of punishment, that is, the factor by which punishment reduces the punished player's income, and we find that contributions to the public good increase monotonically in effectiveness. High effectiveness leads to near complete contribution rates and welfare improvements. Below a certain threshold, however, punishment cannot prevent the decay of cooperation found in the public-good game without punishment. In these cases, the possibility to punish may even worsen welfare. Finally, we show that punishment is a normal and inferior good.

Keywords: Experimental economics, public goods, punishment

JEL Classification: C90

Suggested Citation

Nikiforakis, Nikos and Normann, Hans-Theo, A Comparative Statics Analysis of Punishment in Public-Good Experiments (June 17, 2005). Available at SSRN: https://ssrn.com/abstract=747144 or http://dx.doi.org/10.2139/ssrn.747144

Nikos Nikiforakis

New York University (NYU) - New York University Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

HOME PAGE: http://https://sites.google.com/site/nnikiforakis/home

Hans-Theo Normann (Contact Author)

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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