Article ID Journal Published Year Pages File Type
5034587 Journal of Economic Behavior & Organization 2017 19 Pages PDF
Abstract

•Coordinated punishment can be profitable to the punishers, rather than costly.•The power to punish may be abused to expropriate people.•In heterogenous societies, minorities rather than free-riders may be expropriated.•We show this in real world examples and a laboratory experiment.

Current literature views the punishment of free-riders as an under-supplied public good, carried out by individuals at a cost to themselves. It need not be so: often, free-riders' property can be forcibly appropriated by a coordinated group. This power makes punishment profitable, but it can also be abused. It is easier to contain abuses, and focus group punishment on free-riders, in societies where coordinated expropriation is harder. Our theory explains why public goods are undersupplied in heterogenous communities: because groups target minorities instead of free-riders. In our laboratory experiment, outcomes were more efficient when coordination was more difficult, while outgroup members were targeted more than ingroup members, and reacted differently to punishment.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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