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An important insight from the last decade of research on the provision of public goods is that the problem of voluntary cooperation can be partially resolved by allowing individuals to engage in informal sanctions, i.e. in costly punishment of other group members after learning of their contributions (Fehr and G?chter, 2000). This insight provides an important stimulus to the economic theory of collective action because a preference-based willingness to incur a cost to punish free riding can dramatically alter equilibrium outcomes in social dilemma problems, and evidence suggests that such a preference-based willingness to punish is widespread (Falk, Fehr and Fischbacher, 2005).
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