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Non-governmental public norm enforcement in large societies as a two-stage game of voluntary public good provision


Buchholz, Wolfgang; Falkinger, Josef; Ruebbelke, Dirk (2011). Non-governmental public norm enforcement in large societies as a two-stage game of voluntary public good provision. Working Paper Series in Economics and Econometrics 566, University of Zurich.

Abstract

In small groups, norm enforcement is achieved through mutual punishment and reward. In large societies, norms are enforced by specialists such as government officials. However, not every public cause is overseen by states, for instance those organized at the international level. This paper shows how non-governmental norm enforcement can emerge as a decentralized equilibrium. As a first stage, individuals voluntarily contribute to a non-governmental agency that produces an incentive system. The second stage is the provision of a public good on the basis of private contributions. The incentive system punishes and rewards deviations from the norm for contributions by means of public approval or disapproval of behavior. It is shown that, even in large populations, nongovernmental norm enforcement can be supported in a non-cooperative equilibrium of utility-maximizing individuals.

Abstract

In small groups, norm enforcement is achieved through mutual punishment and reward. In large societies, norms are enforced by specialists such as government officials. However, not every public cause is overseen by states, for instance those organized at the international level. This paper shows how non-governmental norm enforcement can emerge as a decentralized equilibrium. As a first stage, individuals voluntarily contribute to a non-governmental agency that produces an incentive system. The second stage is the provision of a public good on the basis of private contributions. The incentive system punishes and rewards deviations from the norm for contributions by means of public approval or disapproval of behavior. It is shown that, even in large populations, nongovernmental norm enforcement can be supported in a non-cooperative equilibrium of utility-maximizing individuals.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:December 2011
Deposited On:27 Nov 2012 13:49
Last Modified:07 Dec 2017 16:35
Series Name:Working Paper Series in Economics and Econometrics
Number of Pages:27
Additional Information:A first version of the basic idea of this paper was presented in a working paper by Falkinger [2004]. This new version of the paper exploits the Aggregative Game Approach as developed by Cornes and Hartley (2003, 2007) in order to analyze this idea in a more general and comprehensive way. For this purpose Josef Falkinger asked Wolfgang Buchholz and Dirk Rübbelke to join him as authors. Some of the research by Dirk Rübbelke on this paper was conducted during his stay at the Australian National University in Canberra in 2011.
Free access at:Official URL. An embargo period may apply.
Official URL:http://cbe.anu.edu.au/research-papers/wpecon/non-governmental-public-norm-enforcement-in-large-societies-as-a-two-stage-game-of-voluntary-public-good-provision/
Other Identification Number:ISBN : 0 86831 566 4

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