Endogenous sanctioning institutions and migration patterns: Experimental evidence

Abstract

We experimentally analyze the effect of the endogenous choice of sanctioning institutions on cooperation and migration patterns across societies. In our experiment, subjects are allocated to one of two groups, are endowed with group-specific preferences, and play a public goods game for 30 periods. Each period, subjects can move between groups and, at fixed intervals, can vote on whether to implement formal (centralized) sanctioning institutions in their group. We compare this environment to one in which only one group is exogenously endowed with sanctioning institutions. We find that subjects' ability to vote on institutions leads to (i) a more efficient partition of subjects between groups, (ii) a lower migration rate, (iii) an increase in overall payoffs, and (iv) a decrease in both inter-and intra-groups (payoff) inequality. Over time, subjects tend to vote for sanctioning institutions and contribute to the public good. AbstractWe experimentally analyze the effect of the endogenous choice of sanctioning institutions on cooperation and migration patterns across societies. In our experiment, subjects are allocated to one of two groups, are endowed with group-specific preferences, and play a public goods game for 30 periods. Each period, subjects can move between groups and, at fixed intervals, can vote on whether to implement formal (centralized) sanctioning institutions in their group. We compare this environment to one in which only one group is exogenously endowed with sanctioning institutions. We find that subjects' ability to vote on institutions leads to (i) a more efficient partition of subjects between groups, (ii) a lower migration rate, (iii) an increase in overall payoffs, and (iv) a decrease in both inter-and intra-groups (payoff) inequality. Over time, subjects tend to vote for sanctioning institutions and contribute to the public good. We are particularly indebted to Gary Charness and Carolina Di Tella for very useful comments and discussions. We also thank seminar participants at the University of Exeter BID Brown Bag seminar. The authors are thankful to the University of Exeter BID and BIP Clusters for financially supporting this project. All remaining errors are ours.

The choice of institutions to solve cooperation problems: a survey of experimental research

“…Rabin 1993;Fehr and Schmidt 1999) seem to be more suitable to predict or explain behavior. While some of the studies use social preference models to explain the experimental results (Kosfeld et al 2009;Sutter et al 2010;Markussen et al 2014;Cobo-Reyes et al 2019;Dannenberg et al 2019) we have not seen the utilization of learning models yet.…”

Voting on sanctioning institutions in open and closed communities: experimental evidence

“…Subjects are not more likely to migrate when groups implements dierent sanctioning institutions, relative to periods in which the two groups play under the same rule-set. Yet, when sanctioning institutions do dier across groups, a vast majority of the migrating subjects moves 27 For a similar result, see Cobo-Reyes, Katz and Meraglia (2019).…”

Voting on Sanctioning Institutions in Open and Closed Communities: Experimental Evidence

“…We focus on the choice of institutions, whereas Robbett is mainly interested in eciency. Cobo-Reyes, Katz and Meraglia (2019) study the choice between formal sanctions and no sanctions at all in a public goods game but, like Robbett (2014), vary only the availability of the voting by ballot option, while voting with feet is always allowed. Hence, none of these papers compare voting about institutions in open and closed societies.…”