The effects of punishment in dynamic public-good games

Oezguer Guererk, Bettina Rockenbach and Irenaeus Wolff
Authors registered in the RePEc Author Service: Özgür Gürerk

MPRA Paper from University Library of Munich, Germany

Abstract: Considerable experimental evidence shows that although costly peer-punishment enhances cooperation in repeated public-good games, heavy punishment in early rounds leads to average period payoffs below the non-cooperative equilibrium benchmark. In an environment where past payoffs determine present contribution capabilities, this could be devastating. Groups could fall prey to a poverty trap or, to avoid this, abstain from punishment altogether. We show that neither is the case generally. By continuously contributing larger fractions of their wealth, groups with punishment possibilities exhibit increasing wealth increments, while increments fall when punishment possibilities are absent. Nonetheless, single groups do succumb to the above-mentioned hazards.

Keywords: Public good; Dynamic game; Punishment; Endowment endogeneity; Poverty-trap; Experiment (search for similar items in EconPapers)
JEL-codes: C73 C91 H41 (search for similar items in EconPapers)
Date: 2010-03-15
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth, nep-hpe and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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https://mpra.ub.uni-muenchen.de/22331/1/MPRA_paper_22331.pdf revised version (application/pdf)

Related works:
Working Paper: The effects of punishment in dynamic public-good games (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:22097

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