Endogenous sanctioning institutions and migration patterns: Experimental evidence

Abstract

We experimentally analyze the e ect of the endogenous choice of sanctioning institutions on cooperation and migration patterns. Subjects are assigned to one of two groups, are endowed with group-speci c preferences, and play a public goods game. We compare an environment in which subjects can move between groups and vote on whether to implement sanctions, to one in which only one group is exogenously endowed with sanctions. We nd that the possibility of voting leads to a more e cient partition of subjects across groups, higher payo s, lower inequality, and lower migration rates. Over time, subjects tend to vote for institutions.