Broken Punishment Networks in Public Goods Games: Experimental Evidence
Abstract: Abundant evidence suggests that high levels of contributions to public goods can be sustained through
self-governed monitoring and sanctions. This experimental study investigates the effectiveness of
decentralized sanctioning institutions where punishment opportunities are restricted to agents who are
linked through alternative punishment networks. We find that the structure of the punishment network
significantly impacts contributions to the public good, but not overall efficiencies. Contributions collapse
over decision rounds in groups with limited punishment opportunities, even if the absolute punishment
capacity corresponds to the complete punishment network where all agents are allowed to punish each
other. However, after allowing for the costs of sanctions, efficiencies are similar across the different
networks that allow for punishment and the no-punishment network.