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The Impact of Announcing Future Punishment Opportunities in a Public Goods Game

11 December 2014
Publication Type: Working Paper
JEL Code: C9, H30, H41, Q58

We explore the effects of announcements of future punishment opportunities in public goods games. Announcements can influence subject behaviour, through changing expectations, before the institution is implemented (adjustment effect) or after implementation (adaptation effect). Our results indicate that announcements do not lead to significant adjustment effects, nor increased free-riding before implementation. Once punishment opportunities are implemented, those forewarned with announcements exhibit positive adaptation effects. The number of contributors to the public good increases relative to the no-announcement treatment; this is partly mediated by increased utilisation of punishment, but diminished anti-social use of the institution. Announcements can therefore increase the efficacy of institutional change.

Series title: Working paper 484
1 December 2014
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