Deterrence by imperfect sanctions: A public good experiment

Arbeitspapier

Sanctions are often so weak that a money maximizing individual would not be deterred. In this paper I show that they may nonetheless serve a forward looking purpose if sufficiently many individuals are averse against advantageous inequity. Using the Fehr/Schmidt model (QJE 1999) I define three alternative channels: (a) identical preferences are common knowledge, but inequity is not pronounced enough to sustain cooperation; (b) heterogeneous preferences are common knowledge; (c) there is preference uncertainty. In a linear public good with punishment meted out by a disinterested participant, I test two implications of the model: (a) participants increase contributions in reaction to imperfect punishment; (b) imperfect punishment helps sustain cooperation if participants experience free-riding.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Preprints of the Max Planck Institute for Research on Collective Goods ; No. 2013/9

Classification and Topics

• Classification: Wirtschaft ; Public Goods ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Illegal Behavior and the Enforcement of Law ; Design of Experiments: Laboratory, Individual ; Criminal Law ; Tort Law and Product Liability; Forensic Economics
• Subject: deterrence ; public good experiment ; inequity aversion ; imperfect sanction ; Fehr/Schmidt preferences ; centralized punishement

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Engel, Christoph
• Event: Veröffentlichung
• (who): Max Planck Institute for Research on Collective Goods
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/85005
• Last update: 10.03.2025, 11:42 AM CET