Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71938
Authors: 
Sutter, Matthias
Haigner, Stefan
Kocher, Martin G.
Year of Publication: 
2008
Series/Report no.: 
Working Papers in Economics and Statistics 2008-07
Abstract: 
We analyze an experimental public goods game in which group members can endogenously determine whether they want to supplement a standard voluntary contribution mechanism with the possibility of rewarding or punishing other group members. We find a large and positive effect of endogenous institutional choice on the level of cooperation in comparison to exogenously implemented institutions. This suggests that participation rights enhance cooperation in groups. With endogenous choice, groups typically vote for the reward option, even though punishment is actually more effective in sustaining high levels of cooperation. Our results are evaluated against the predictions of social preference models.
Subjects: 
public goods
punishment
reward
endogenous institutional choice
voting
experiment
JEL: 
C72
C91
C92
Document Type: 
Working Paper

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