Broken Punishment Networks in Public Goods Games: Experimental Evidence

Abundant evidence suggests that high levels of contributions to public goods can be sustained through\nself-governed monitoring and sanctions. This experimental study investigates the effectiveness of\ndecentralized sanctioning institutions where punishment opportunities are restricted to agents who are\nlinked through alternative punishment networks. We find that the structure of the punishment network\nsignificantly impacts contributions to the public good, but not overall efficiencies. Contributions collapse\nover decision rounds in groups with limited punishment opportunities, even if the absolute punishment\ncapacity corresponds to the complete punishment network where all agents are allowed to punish each\nother. However, after allowing for the costs of sanctions, efficiencies are similar across the different\nnetworks that allow for punishment and the no-punishment network.