When to leave carrots for sticks: on the evolution of sanctioning institutions in open communities

Marina Chugunova, Wolfgang J. Luhan, Andreas Nicklisch

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    Abstract

    When asked, people dislike punishment institutions, although punishment is more effective than rewards to maintain cooperation in social dilemmas. Which institution do they choose in the long run? We study migration patterns in a laboratory experiment that allows participants to migrate continuously between punishment and reward communities. The majority of participants initially chooses the reward institution, but a substantial number of subjects joins the less profitable punishment community subsequently. In this case, the mere threat of punishment establishes high contributions. Income differences and missing compensations for cooperators in the reward community are the key factors for the decision to migrate.
    Original languageEnglish
    Article number109155
    Number of pages4
    JournalEconomics Letters
    Volume191
    Early online date18 Apr 2020
    DOIs
    Publication statusPublished - 1 Jun 2020

    Keywords

    • Open communities
    • Voting with feet
    • Cooperation
    • Sanctions
    • Public goods

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