Institution Formation in Public Goods Games

Copyright © 2009 American Economic Association All rights reserved.

Sanctioning institutions are of utmost importance for overcoming free-riding tendencies and enforcing outcomes that maximize group welfare in social dilemma situations. We investigate, theoretically and experimentally, the endogenous formation of institutions in public goods provision. Our theoretical analysis shows that players may form sanctioning institutions in equilibrium, including those governing only a subset of players. The experiment confirms that institutions are formed and that it positively affects cooperation and group welfare. However, the data also shows that success is not guaranteed. Players are unwilling to implement equilibrium institutions in which some players have the opportunity to free ride. Our results emphasize the role of fairness in the institution formation process.

American Economic Association

2009-09

English(eng)

journal article

AM

00028282

AA00021334

American Economic Review

99

4

1335

1355

010a Journal Articles　=　雑誌掲載論文

https://hdl.handle.net/10086/23295