Effects of Monitoring and Information on Public Goods Provisioning: Experimental Evidence

Abstract

"Social dilemmas, n-person prisoner dilemmas, and free-rider/public goods dilemmas share a common set of concerns. They generally point to settings in which markets fail and in which governments play an important role. These variously named 'dilemmas' share a common theoretical structure and a common conclusion. At heart such settings are non-cooperative, whereby individua1s cannot strike bargains over which binding agreements can be made to resolve conflict. As well, in each setting a strategy exists which is pareto superior to the Nash dominant strategy. Taken in combination, participants in such dilemmas have incentives to select the Nash dominant strategy which results in either the commons being destroyed or the public good not being provided. Such a result variously has been used as a call for a centralized (government) authority to step in and restructure the outcome (see Ostrom, 1986 for a review and critique of this view)."

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Keywords

monitoring and sanctioning, public goods and bads, common pool resources, prisoner's dilemma, game theory

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