The problem of maintaining compliance within stable coalitions: experimental evidence

McEvoy, David M.; Murphy, James J.; Spraggon, John M.; Stranlund, John K.

doi:10.1093/oep/gpq023

Cited by 19 publications

(5 citation statements)

References 28 publications

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“…Next, our results contribute to the literature on institution formation in lab experiments (e.g., Page, Putterman and Unel, 2005;Ertan, Page and Putterman, 2009;Sutter, Haigner and Kocher, 2010;Markussen, Putterman and Tyran, 2014;Kamei, Putterman and Tyran, 2015;Dickinson, Masclet and Villeval, 2015;Kamei, Putterman and Tyran, 2019;Schmidt and Ockenfels, 2021). While groups with more than four players have been studied (e.g., Rockenbach, 2006, 2014;Dannenberg, Lange and Sturm, 2014;McEvoy et al, 2011;Kamei, Putterman and Tyran, 2019), we are -to the best of our knowledge -the first to analyze group-size effects by exogenously varying the size of the group in the context of institution formation in social dilemma situations. Moreover, we do so in an environment in which the material incentives to form and the inequality in an institution of the same relative size are orthogonal to group size.…”

mentioning

confidence: 57%

Fairness and Inequality in Institution Formation

Detemple,

Kosfeld

2023

SSRN Journal

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mentioning

confidence: 57%

Fairness and Inequality in Institution Formation

Detemple,

Kosfeld

2023

SSRN Journal

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“…The reason for this is that, even though members by design earn less than non-members, they still earn more with the institution in place than without the institution. To coordinate the process on who joins and who does not, the experiments typically include a coordination mechanism like, for example, real-time information about participation decisions (McEvoy et al, 2011), sequential participation decisions (McEvoy et al, 2015), or an additional stage in which members, after being informed about the number of members, decide whether or not to implement the institution (Kosfeld et al, 2009).…”

Section: Global Cooperation and Voting With One's Feetmentioning

confidence: 99%

The Choice of Institutions to Solve Cooperation Problems: A Survey of Experimental Research

Dannenberg

Gallier

2019

SSRN Journal

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A growing experimental literature studies the endogenous choice of institutions to solve cooperation problems arising in prisoners' dilemmas, public goods games, and common pool resource games. Participants in these experiments have the opportunity to influence the rules of the game before they play the game. In this paper, we review the experimental literature of the last 20 years on the choice of institutions and describe what has been learned about the quality and the determinants of institutional choice. Almost all institutions improve cooperation if they are implemented, but they are not always implemented by the players. Institutional costs, remaining free-riding incentives, and a lack of learning opportunities are the most important barriers. At the individual level, own cooperativeness and beliefs about other players' behavior can be identified as important determinants of institutional choice. Cooperation tends to be higher under endogenously chosen institutions than exogenously imposed institutions. However, a significant share of players fails to implement the institution and they often perform poorly, which is why we cannot conclude that letting people choose is better than enforcing institutions from outside.

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“…The extent to which different institutions are able to generate gains in the provision of the public good along the intensive and extensive margins has so far not received much attention in the experimental literature. McEvoy et al (2008) experimentally evaluate the performance of coalitions in which members have the opportunity to violate their commitments and fund a third-party enforcer to maintain compliance. Contrary to theoretical predictions they find that member-financed enforcement decreases the average provision of the public good.…”

Section: Introductionmentioning

confidence: 99%

On the Formation of Coalitions to Provide Public Goods - Experimental Evidence from the Lab

Dannenberg¹,

Lange²,

Sturm³

2010

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10037.pdf Non-technical summaryThe provision of public goods often relies on voluntary contributions and cooperation.Many economic experiments have studied the determinants of cooperative behavior as well as the implementation of institutions to increase the voluntary contributions.While most of the experimental literature focuses on individual contributions to public goods, many real-world examples involve situations in which subgroups of individuals or countries (coalitions) implement an institution to address the public good problem. International agreements serve as one example. Some countries may form a coalition to cooperate while others may free-ride on the coalition's efforts.Forming a coalition thereby involves (at least) two challenges: On the one hand, the institutional arrangement needs to attract members to the coalition. On the other hand, any given coalition should be able to increase the provision of the public good. In this paper, we compare the ability of different institutions to address these two issues by means of a laboratory experiment. We thereby test theory on the formation of coalitions and compare the resulting provision level of the public good with those achieved by institutions that do not allow for the formation of groups, like a voluntary contribution mechanism.Our experiment shows that only few players form a coalition and only minor efficiency gains result when members are required to contribute a certain amount to the public good. The coalition structure is better accepted when coalition members can negotiate about the public good provision and agree on the "smallest common denominator". The experiment thereby shows that the way how terms of coalitions are reached matters for the acceptance of such institutions. However, the results indicate that not all players participate in the coalition. The coalition structure therefore suffers from manifesting inequality between insiders and outsiders and thereby lowers the willingness of coalition members to provide the public good. If, in contrast, all players are forced to take part in the negotiations about the smallest common denominator, they often achieve close to efficient public good provision level. Das Wichtigste in Kürze

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The problem of maintaining compliance within stable coalitions: experimental evidence

Cited by 19 publications

References 28 publications

Fairness and Inequality in Institution Formation

Fairness and Inequality in Institution Formation

The Choice of Institutions to Solve Cooperation Problems: A Survey of Experimental Research

On the Formation of Coalitions to Provide Public Goods - Experimental Evidence from the Lab

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