The imposition of sanctions is one of the most common means of enforcing cooperation in decentralized interactions. Typically, agents are asymmetric in the sense that each has a different sanctioning power. Using a public-good experiment we analyze such a decentralized punishment institution in...

This paper analyses vertical cross-shareholding, that is, the mutual holding of a minority of shares between vertically related firms. We investigate the conditions under which cross-shareholding improves efficiency. First, we explore the issue in a game-theoretic model and find that...

This paper provides a comparative statics analysis of punishment in public-good experiments. We vary systematically the effectiveness of punishment, that is, the factor by which punishment reduces the punished player’s income, and we find that contributions to the public good increase...

We use a public-good experiment to analyze behavior in a decentralized asymmetric punishment institution. The institution is asymmetric in the sense that players differ in the effectiveness of their punishment. At the aggregate level, we observe remarkable similarities between outcomes in...

We use a public-good experiment to analyze behavior in a decentralized asymmetric punishment institution. The institution is asymmetric in the sense that players differ in the effectiveness of their punishment. At the aggregate level, we observe remarkable similarities between outcomes in...

In the public goods literature, there have been recently a number of experiments which demonstrate how the problem of the under-provision of a public good can be solved through mutual monitoring and sanctioning between the members of a group when antisocial behavior is observed. In many...

A number of studies have shown that peer punishment can sustain cooperation in public good games. This paper shows that the format used to give subjects feedback is critical for the e¢ cacy of punishment. Providing subjects with infor- mation about the earnings of their peers leads to lower...

The power to coerce workers is important for the e¢ cient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a...