Matthias Sutter - Innsbruck
Choosing the stick or the carrot? - Endogenous institutional choice in social dilemma situations
We analyze an experimental public goods game in which group members can endogenously determine whether they want to supplement a standard voluntary contribution mechanism with the possibility to reward or punish other group members. We find a large and positive effect of endogenous institutional choice on the level of cooperation when we compare contributions with endogenous choice to those where a given institution is implemented exogenously. This result suggests that democratic participation rights are beneficial for the cooperation in groups. With endogenous choice, groups typically choose the reward option, even though the punishment option is actually more efficient for sustaining cooperation.
Aljaz Ule: A.Ule@uva.nl
Mikhail Anufriev: M.Anufriev@uva.nl
Franc Klaassen: F. Klaassen@uva.nl