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Experimental Economics

, Volume 11, Issue 4, pp 358–369 | Cite as

A comparative statics analysis of punishment in public-good experiments

  • Nikos Nikiforakis
  • Hans-Theo Normann
Article

Abstract

This paper provides a comparative-statics analysis of punishment in public-good experiments. We vary the effectiveness of punishment, that is, the factor by which punishment reduces the punished player’s income. The data show that contributions increase monotonically in punishment effectiveness. High effectiveness leads to near complete cooperation and welfare improvements. Below a certain threshold, however, punishment cannot prevent the decay of cooperation. In these cases, punishment opportunities reduce welfare. The results suggest that the experimenter’s choice of the punishment effectiveness is of great importance for the experimental outcome.

Keywords

Decentralized punishment Punishment effectiveness Public good Welfare 

JEL

C92 D70 H41 

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Supplementary material

10683_2007_9171_MOESM1_ESM.doc (45 kb)
Data Object
10683_2007_9171_MOESM2_ESM.xls (200 kb)
Data Object

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Copyright information

© Economic Science Association 2007

Authors and Affiliations

  1. 1.Department of EconomicsThe University of MelbourneMelbourneAustralia
  2. 2.Department of Economics, Royal HollowayUniversity of LondonEghamUK

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