Group Size, Coordination, and the Effectiveness of the Punishment Mechanism in the VCM: An Experimental Investigation

Group Size, Coordination, and the Effectiveness of Punishment in the Voluntary Contributions Mechanism: An Experimental Investigation

10.32920/14639850 ◽

2021 ◽

Author(s):

Bin Xu ◽

C. Bram Cadsby ◽

Liangcong Fan ◽

Fei Song

Keyword(s):

Group Size ◽

Group Treatment ◽

Entire Group ◽

Voluntary Contributions ◽

Good Efficiency ◽

Marginal Group ◽

Voluntary Contributions Mechanism ◽

Punishment Mechanism ◽

Per Capita ◽

The Individual

We examine the effectiveness of the individual-punishment mechanism in larger groups, comparing groups of four to groups of 40 participants. We find that the individual punishment mechanism is remarkably robust when the marginal per capita return (MPCR), i.e. the return to each participant from each dollar that is contributed, is held constant. Moreover, the efficiency gains from the punishment mechanism are significantly higher in the 40-participant than in the four-participant treatment. This is true despite the coordination problems inherent in an institution relying on decentralized individual punishment decisions in the context of a larger group. It reflects increased per capita expenditures on punishment that offset the greater coordination difficulties in the larger group. However, if the marginal group return (MGR), i.e. the return to the entire group of participants, stays constant, resulting in an MPCR that shrinks with group size, no such offset occurs and punishment loses much but not all of its effectiveness at encouraging voluntary contributions to a public good. Efficiency is not significantly different from the small-group treatment.

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Group Size, Coordination, and the Effectiveness of Punishment in the Voluntary Contributions Mechanism: An Experimental Investigation

Games ◽

10.3390/g4010089 ◽

2013 ◽

Vol 4 (1) ◽

pp. 89-105 ◽

Cited By ~ 9

Author(s):

Bin Xu ◽

C. Cadsby ◽

Liangcong Fan ◽

Fei Song

Keyword(s):

Experimental Investigation ◽

Group Size ◽

Voluntary Contributions ◽

Voluntary Contributions Mechanism

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Group Size, Coordination, and the Effectiveness of Punishment in the Voluntary Contributions Mechanism: An Experimental Investigation

10.32920/14639850.v1 ◽

2021 ◽

Author(s):

Bin Xu ◽

C. Bram Cadsby ◽

Liangcong Fan ◽

Fei Song

Keyword(s):

Group Size ◽

Group Treatment ◽

Entire Group ◽

Voluntary Contributions ◽

Good Efficiency ◽

Marginal Group ◽

Voluntary Contributions Mechanism ◽

Punishment Mechanism ◽

Per Capita ◽

The Individual

We examine the effectiveness of the individual-punishment mechanism in larger groups, comparing groups of four to groups of 40 participants. We find that the individual punishment mechanism is remarkably robust when the marginal per capita return (MPCR), i.e. the return to each participant from each dollar that is contributed, is held constant. Moreover, the efficiency gains from the punishment mechanism are significantly higher in the 40-participant than in the four-participant treatment. This is true despite the coordination problems inherent in an institution relying on decentralized individual punishment decisions in the context of a larger group. It reflects increased per capita expenditures on punishment that offset the greater coordination difficulties in the larger group. However, if the marginal group return (MGR), i.e. the return to the entire group of participants, stays constant, resulting in an MPCR that shrinks with group size, no such offset occurs and punishment loses much but not all of its effectiveness at encouraging voluntary contributions to a public good. Efficiency is not significantly different from the small-group treatment.

Download Full-text