Imperfect Public Monitoring with Costly Punishment: An Experimental Study

Attila Ambrus, Ben Greiner

Publication: Scientific journalJournal articlepeer-review


This paper experimentally investigates the effects of a costly punishment option on cooperation and social welfare in long, finitely repeated public good contribution games. In a perfect monitoring environment, increasing the severity of the potential punishment monotonically increases average net payoffs. In a more realistic imperfect monitoring environment, we find a U-shaped relationship. Access to a standard punishment technology in this setting significantly decreases net payoffs, even in the long run. Access to a severe punishment technology leads to roughly the same payoffs as with no punishment option, as the benefits of increased cooperation offset the social costs of punishing.
Original languageEnglish
Pages (from-to)3317 - 3332
JournalAmerican Economic Review
Issue number7
Publication statusPublished - 2012
Externally publishedYes

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