Enforcing Cooperation in Public Goods Games: Is One Punisher Enough?

We experimentally investigate a finitely repeated public goods game setting where, in each round, access to sanctioning power is exclusively awarded to one single player per group. We show that our central ‘Top Contributors as Punishers’ institution – a mechanism by which a player needs to be the highest contributor in her group in order to earn the right to sanction others – is extremely effective in raising cooperation and welfare due to turnover in the top contributor role and to top contributors’ willingness to substantially sanction others. Our findings yield implications for the design of mechanisms intended to foster cooperation in social dilemma environments.