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The Drama of the Commons
tal studies (with a total of 1,042 subjects participating), Fehr and Schmidt (1999) report that in the final period of public goods games without punishment, the vast majority of subjects play the equilibrium strategy of complete free riding. On average, 73 percent of all subjects choose gi= 0 in the final period. It is also worth mentioning that in addition to those subjects who play exactly the equilibrium strategy, there is often a nonnegligible fraction of subjects who play “close” to the equilibrium.19 In view of the facts, it seems fair to say that the standard model “approximates” the choices of a big majority of subjects rather well. However, if we turn to the public goods game with punishment, a radically different picture emerges although the standard model predicts the same outcome as in the one-stage game. Figure 5-3 shows the distribution of contributions in the final period of the two-stage game conducted by Fehr and Gächter (2000a). Note that the same subjects generated the distribution in the game without and in the game with punishment. Whereas in the game without punishment, most subjects play close to complete defection, a strikingly large fraction of 82.5 percent cooperates fully in the game with punishment. Fehr and Gächter report that the vast majority of punishments are imposed by cooperators on the defectors and that lower contribution levels are associated with higher received punishments. Thus, defectors do not gain from free riding because they are being punished.
When these results are compared with the evidence from common-pool re-
FIGURE 5-3 Contributions to the public good with and without punishment.