The ecology of collective action: A public goods and sanctions experiment with controlled group formation

Accumulating evidence suggests that the outcomes of laboratory public goods games reflect individually differing preferences and beliefs. We designed a public goods experiment with targeted punishment opportunities to (a) confirm subject heterogeneity, (b) test the stability of subjects’ types, and (c) test the proposition that differences in group outcomes can be predicted by knowing the types of individuals who compose those groups. We find that differences in the inclination to cooperate have persistence and that significantly greater social efficiency can be achieved by grouping less cooperative subjects with those inclined to punish free riding while excluding those prone to perverse retaliation against cooperators.