- A-Z
- Jena Economic Resea...
- Volume 5
- Whom to blame? An e...
- Abgebildete Person
- Erschienen
- 14. Oktober 2011
- Nummer des Discussion-Papers
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2011-046
- Schlagwort(e)
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Equality vs. efficiency
Equilibrium selection
Laboratory experiments
Law and economics
- Zusammenfsg.
-
In a situation, where it is efficient for one of two parties to pollute but highly inefficient if both parties do so, the harmed third party can freely impose its damage claims on both parties what crucially determines which equilibrium to expect. Whereas “equality before the law” requires equal punishments, efficient equilibria are predicted when holding one party responsible and letting the other escape punishment. After discussing equilibrium selection for the game, we report on an experiment with two treatment variables: one that determines when the harmed party announces its potential damage claims and one varying a game- and justice-unrelated difference between the two culprits. According to our experimental data, “equality before the law” dominates but is weakened by asymmetry in wealth and the possibility to announce sanctions.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- JEL-Classification for JER
- C72 - Noncooperative Games ; C92 - Laboratory, Group Behavior ; K00 - General