By Ganga Shreedhar, Alessandro Tavoni, and Carmen Marchiori

With the aid of a lab experiment, we explored how imperfect monitoring and punishment networks impact appropriation, punishment, and beliefs in a common-pool resource appropriation dilemma. We examined the differences between a complete network—with perfect monitoring and punishment, in which everyone can observe and punish everyone else—and two imperfect networks that systematically reduced the number of subjects who could monitor and punish others: the directed and undirected circle networks. We found that free riders were punished in all treatments, but network topology affected the type of punishment. The undirected circle induced more severe and prosocial punishment compared to the other two networks. Both imperfect networks were more efficient overall, as the larger punishment capacity available in the complete network elicited a higher amount of punishment.

EnvironmentandDevelopmentEconomics(2019),1–29