Sanctions are often so weak that a money maximizing individual would not be deterred. In this paper I test the hypothesis that imperfect sanctions may nonetheless serve a forward looking purpose if sufficiently many individuals are averse against advantageous inequity. Using a linear public good...

Empirically, the commons are not as tragic as standard theory predicts. The predominant explanation for this finding is conditional cooperation. Yet many real life situations involve insiders, who are directly affected by a dilemma, and outsiders, who may be harmed if the insiders overcome the...