Democratic Punishment in Public Good Games with Perfect and Imperfect Observability

Abstract

In the context of repeated public good contribution games, we experimentally investigate the impact of democratic punishment, when members of a group decide by majority voting whether to inflict punishment on another member, relative to individual peer-to-peer punishment. Democratic punishment leads to more cooperation and higher average payoffs, both under perfect and imperfect monitoring of contributions, primarily by curbing anti-social punishment and thereby establishing a closer connection between a member’s contribution decision and whether subsequently being punished by others. We also find that participating in a democratic punishment procedure makes even non-contributors’ punishment intentions more pro-social.