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The logic of costly punishment reversed: expropriation of free-riders and outsiders

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Abstract

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.

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Original languageEnglish
Pages (from-to)112–130
JournalJournal of Economic Behavior & Organization
Volume135
Early online date12 Jan 2017
DOIs
Publication statusPublished - Mar 2017
Peer-reviewedYes

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  • Cooperation, costly punishment, group coercion, heterogeneity

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