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Rewards and Sanctions and the Provision of Public Goods in One-Shot Settings

Published online by Cambridge University Press:  14 March 2025

James M. Walker  and
Matthew A. Halloran
James M. Walker*
Affiliation:
Department of Economics, Indiana University, Wylie Hall 105, Bloomington, IN 47405, USA
Matthew A. Halloran*
Affiliation:
Department of Economics, Indiana University, Wylie Hall 105, Bloomington, IN 47405, USA
*
email: walkerj@indiana.edu
email: mahallor@indiana.edu
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Abstract

A burgeoning literature in experimental studies of the Voluntary Contribution Mechanism focuses on the ability of institutions that allow the monitoring, sanctioning, and/or rewarding of others to facilitate cooperation. In this paper rewards and sanctions are examined in a one-shot VCM setting that so far has been unexplored in the literature. The study finds that while some subjects are willing to reward and sanction others at a personal cost, the opportunity to reward or sanction is ineffective in facilitating cooperation relative to previous experiments in which a repeated game environment is employed. The study also compares behavior in an environment in which the imposition of rewards and sanctions is certain to an environment in which imposition is uncertain. The expected value of the reward or sanction is kept constant across environments to focus simply on the effect of uncertainty about imposition. Uncertainty does not change behavior in a significant way, either in the level of cooperation or the willingness of individuals to impose rewards or sanctions.

Keywords

public goodsrewardssanctions

JEL classification

H41: Public Goods C90: General D70: General
Type
Research Article
Information
Experimental Economics , Volume 7 , Issue 3 , October 2004 , pp. 235 - 247
Copyright
Copyright © 2004 Economic Science Association

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