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The Effect of Rewards and Sanctions in Provision of Public Goods

43 Pages Posted: 28 Sep 2006  

Martin Sefton

University of Nottingham - School of Economics

Robert Shupp

Michigan State University - Department of Agricultural, Food and Resource Economics

James M. Walker

Indiana University - Department of Economics and Workshop in Political Theory and Policy Analysis

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Date Written: August 29, 2006

Abstract

A growing number of field and experimental studies focus on the institutional arrangements by which individuals are able to solve collective action problems. Important in this research is the role of reciprocity and institutions that facilitate cooperation via opportunities for monitoring, sanctioning, and rewarding others. Sanctions represent a cost to both the participant imposing the sanction and the individual receiving the sanction. Rewards represent a zero sum transfer from participants giving to those receiving rewards. We contrast reward and sanction institutions in regard to their impact on cooperation and efficiency in the context of a public goods experiment.

Suggested Citation

Sefton, Martin and Shupp, Robert and Walker, James M., The Effect of Rewards and Sanctions in Provision of Public Goods (August 29, 2006). CAEPR Working Paper No. 2006-005. Available at SSRN: https://ssrn.com/abstract=932683 or http://dx.doi.org/10.2139/ssrn.932683

Martin Sefton (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Robert Shupp

Michigan State University - Department of Agricultural, Food and Resource Economics ( email )

Agricultural Hall
East Lansing, MI 48824
United States
765-285-3724 (Phone)
765-285-8024 (Fax)

James M. Walker

Indiana University - Department of Economics and Workshop in Political Theory and Policy Analysis ( email )

Wylie Hall 105
Bloomington, IN 47405
United States
812-855-2760 (Phone)
812-855-3736 (Fax)

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