Public Goods and Voting on Formal Sanction Schemes: An Experiment

Abstract

The burgeoning literature on the use of sanctions to support public goods provision has largely neglected the use of formal or centralized sanctions. We let subjects playing a linear public goods game vote on the parameters of a formal sanction scheme capable both of resolving and of exacerbating the free-rider problem, depending on parameter settings. Most groups quickly learned to choose parameters inducing efficient outcomes. But despite uniform money payoffs implying common interest in those parameters, voting patterns suggest significant influence of cooperative orientation, political attitudes, and of gender and intelligence.

Keywords: public good, voluntary contribution, formal sanction, experiment, penalty, voting

JEL Classification: C91, C92, D71, D72, H41