The provision of public goods often relies on voluntary contributions and cooperation. While most of the experimental literature focuses on individual contributions, many real-world problems involve the formation of institutions among subgroups (coalitions) of players. International agreements...

We use an experiment to test the hypothesis that groups consisting of like-minded cooperators are able to cooperate irrespective of punishment and therefore have a lower demand for a costly punishment institution than groups of like-minded free riders, who are unable to cooperate without...