The problem of maintaining compliance within stable coalitions: experimental evidence

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Dave McEvoy Ph.D., Associate Professor (Creator)
Appalachian State University (ASU )
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Abstract: This study examines the performance of stable cooperative coalitions that form to provide a public good when coalition members have the opportunity to violate their commitments. A stable coalition is one in which no member wishes to leave and no non-member wishes to join. To counteract the incentive to violate their commitments, coalition members fund a third-party enforcer. This leads to the theoretical conclusion that stable coalitions are larger, and provide more of a public good, when their members are responsible for financing enforcement. However, our experiments reveal that member-financed enforcement of compliance reduces the provision of the public good. The decrease is attributed to an increase in the participation threshold for a stable coalition to form and to significant levels of noncompliance. Provision of the public good increases significantly when we abandon the strict stability conditions and require all subjects to join a coalition for it to form.

Additional Information

McEvoy, David, James Murphy, John K. Stranlund and John Spraggon. (2011). The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence. Oxford Economic Papers, 63(3):475-98. Published by Oxford University Press (ISSN: 0030-7653) doi:10.1093/oep/gpq023
Language: English
Date: 2011

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