Tell Me How to Rule: Leadership, Delegation, and Voice in Cooperation

Date: 2016
By: Marco Faillo
Federico Fornasari
Luigi Mittone
Following some recent studies, we experimentally test the effect of intra-group leadership in a public good experiment. Specifically, individuals taking part in our experiment are randomly assigned either the role of leader or the role of follower. Leaders take part in a public good game, aware of the fact that every decision they make directly affects their followers. In this sense, our experimental setting combines the dimension of leadership in cooperation with the one of delegated agents. In our experiment, we find that leadership produces two main effects: subjects contribute more, and tend to punish more frequently. In spite of the presence of higher contributions, we observe lower payoffs; these are caused by an aggressive behavior that push leaders to mane an undue use of punishment. Allowing one-sided communication between followers and leaders provide a different effect: communication reduces decision makers’ aggressiveness, leading to lower contributions and punishment, but better results in terms of final payoffs. The same welfare can be reached when leadership is not implemented at all; this suggests that the presence of a dictatorial leader in public goods with punishment can be beneficial only when there is communication.
Keywords: Voluntary contribution experiment, Leadership, Punishment
JEL: C72 C92 H41 O12

Instruction length and content: Effects on punishment behaviour in public goods games

Date: 2015-12-07
By: Abhijit Ramalingam (University of East Anglia)
Antonio J. Morales (Universidad de Malaga)
James M. Walker (Indiana University)
Instruction length and content have been shown to affect comprehension levels and decision times of experimental subjects in public goods games. However, to date, there is no evidence of a significant impact on behaviour. We investigate the effects of instruction length and content on comprehension and behaviour in a more complicated setting - a public goods game with punishment. We find that longer instructions, that include examples that highlight the positive externality associated with public goods contributions, increase the comprehension levels of subjects, significantly lowering the time taken to answer the pre-experiment quiz and make decisions. Importantly, the differences in instructions are also associated with significant differences in behaviour. On average, groups that receive shorter instructions fail to use punishment effectively to raise contribution levels while those that receive longer instructions sustain higher contribution levels over time. In the former case, groups target low contributors less frequently than appears necessary to induce greater cooperation.
Keywords: public goods, punishment, instruction length, decision times, contributions, punishment
JEL: C72 C91 C92 H41

Size Matters – When it Comes to Lies

Date: 2011-05-17
By: Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany)
Ruslan Gurtoviy (Department of Business Administration, University of Trier, Germany)
Verena Utikal (Department of Economics, University of Erlangen-Nürnberg, Germany)
A small lie appears trivial but it obviously violates moral commandments. We analyze whether the preference for others’ truth telling is absolute or depends on the size of a lie. In a laboratory experiment we compare punishment for different sizes of lies controlling for the resulting economic harm. We find that people are sensitive to the size of a lie and that this behavioural pattern is driven by honest people. People who lie themselves punish softly in any context.
Keywords: Lying, norm violation, punishment, experiment
JEL: C91

Cooperation limitations under a one-time threat of expulsion and punishment

Date: 2011-03
By: Aaron Lowen (Grand Valley State University)
Pamela Schmitt (United States Naval Academy)
We examine the role one-time threats of expulsion and punishment have on voluntary contributions in a public goods game. This paper extends the work of Cinyabuguma, Page, and Putterman (2005), who find that the threat of expulsion in every period raises contributions to near Pareto Optimal levels. In our experiments, participants played in 15-round sessions where they were allowed to vote to remove other subjects only after round 5 and in one design also voted whether to punish the remaining subjects after round 10. We find that the additional threat of punishment not only increased the contributions of participants before the punishment vote, but also resulted in the expulsion of participants who had contributed more than in the no punishment treatment. Efficiency with expulsion is 58.07% without punishment, and 57.13% with punishment, including the cost for voting and punishment. Our findings indicate that the threat of expulsion as a sanctioning mechanism may not be helpful for public good provision unless expulsion can occur in every period, the threat of costly punishment increases contributions with little impact on efficiency, and that standards for inclusion rise when later punishment is available.