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The seeds of success: the pivotal role of first round cooperation in public goods games

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Gurdal, Mehmet Y.
Torul, Orhan
Yahsi, Mustafa

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This paper examines cooperation and punishment in a public goods game in Istanbul. Unlike prior within-subject designs, we use a between-subject design with separate no-punishment and punishment conditions. This approach reveals that punishment significantly increases contributions, demonstrating the detrimental effect of having prior experience without sanctions. We highlight two critical factors-heterogeneous initial contributions across groups and how subjects update their contributions based on prior contributions and received punishment. An agent-based model verifies that the interaction between these two factors leads to a strong persistence of contributions over time. Analysis of related data from comparable cities shows similar patterns, suggesting our findings likely generalize if using a between-subject design. We conclude that overlooking within-group heterogeneity biases cross-society comparisons and subsequent policy implications.

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Springer

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Economics

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Journal of the Economic Science Association-JESA

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10.1007/s40881-023-00153-3

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