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Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help

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Fischer,  Sven
Max Planck Institute for Research on Collective Goods, Max Planck Society;

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Grechenig,  Kristoffel
Max Planck Institute for Research on Collective Goods, Max Planck Society;

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Citation

Fischer, S., Grechenig, K., & Meier, N. (2013). Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help.


Cite as: http://hdl.handle.net/11858/00-001M-0000-0028-6DF6-B
Abstract
We run several experiments which allow us to compare cooperation under perfect and imperfect information and under a centralized and decentralized punishment regime. We nd that (1) centralization by itself does not improve cooperation and welfare compared to an informal, peer-to-peer punishment regime and (2) centralized punishment is equally sensitive to noise as decentralized punishment, that is, it leads to signi cantly lower cooperation and welfare (total pro ts). Our results shed critical light on the widespread conjecture that the centralization of punishment institutions is welfare increasing in itself.