We compare three forms of communication and punishment as incentives to increase contributions to public goods in laboratory experiments. We find, as in earlier experiments, that face-to-face communication has very strong effects, but surprisingly that verbal communication through a chat room preserving anonymity and excluding facial expression, etc. was almost as efficient. Numerical communication, via computer terminals, had no net effect on contributions or efficiency. Punishment, as in earlier experiments, increased contributions but because of its cost had little net effect on efficiency.

Recent experiments have shown that voluntary punishment of free riders can increase contributions, mitigating the free-rider problem. But frequently punishers punish high contributors, creating “perverse†incentives which can undermine the benefits of voluntary punishment. In our experiment, allowing punishment of punishing behaviors reduces punishment of high contributors, but gives rise to efficiency-reducing second-order “perverse†punishment. On balance, efficiency and contributions are slightly but not significantly enhanced. Copyright Economic Science Association 2006Public goods, Collective action, Experiment, Punishment,

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