Preferences over Punishment and Reward Mechanisms in Social Dilemmas

The existing results from literature on preferences over sanctions in social dilemmas are inconclusive. Our experimental setup allows us to study both preferences over punishment and reward mechanisms and preferences over their levels of effectiveness. We show that the voluntary contribution mechanism (VCM) with reward is the most favored and the most efficient institution, although the VCM with punishment leads to higher contributions. Subjects prefer extreme values of the sanctioning technologies, and contributions increase in the level of effectiveness. There is no difference in the voting pattern between a partner- and a strangermatching treatment.