ICES Experimental Economics Brown Bag Lecture
Institutional Stability and Voluntary Provision: The Understudied Punishment Second-Order Public Good
Friday, October 25, 2024 4:00 PM to 5:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), Room 5075
The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:
George Mason University
Institutional Stability and Voluntary Provision: The Understudied Punishment Second-Order Public Good
Abstract
We study the stability and provision of equilibrium selection institutions through voluntary contribution, emphasizing the important of individual rationality, credibility, and coordination. Our analysis vehicle is punishment in a public goods game, modeled explicitly as a second-order public good with voluntary contribution to study these phenomena, with peer groups determining individual levels of contribution to punishment before or after one-shot games with strangers. We provide theoretical results supporting the provision of punishment as a Nash equilibrium in before, but not after, treatments and test this implication in the lab. Contrasting with previous studies, we provide opportunities for subjects to learn of others’ behavior directly, which we predict will lead to a deviation from unstable, non-incentive-compatible strategies observed in other studies, while also not imposing a strong exogenous institution.
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