TY  - JOUR
AU  - Andreoni,James
AU  - Gee,Laura K.
TI  - Gun For Hire: Does Delegated Enforcement Crowd out Peer Punishment in Giving to Public Goods?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17033
PY  - 2011
Y2  - May 2011
UR  - http://www.nber.org/papers/w17033
L1  - http://www.nber.org/papers/w17033.pdf
N1  - Author contact info:
James Andreoni
Department of Economics
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/534-3832
Fax: 858/534-7040
E-Mail: andreoni@ucsd.edu

Laura K. Gee
Department of Economics
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
E-Mail: l1gee@ucsd.edu
AB  - This paper compares two methods to encourage socially optimal provision of a public good. We compare the efficacy of vigilante justice, as represented by peer-to-peer punishment, to delegated policing, as represented by the “hired gun” mechanism, to deter free riding and improve group welfare. The “hired gun” mechanism (Andreoni and Gee, 2011) is an example of a low cost device that promotes complete compliances and minimal enforcement as the unique Nash equilibrium. We find that subjects are willing to pay to hire a delegated policing mechanism over 70% of the time, and that this mechanism increases welfare between 15% to 40%. Moreover, the lion’s share of the welfare gain comes because the hired gun crowds out vigilante peer-to-peer punishments.
ER  -