Template-Type: ReDIF-Paper 1.0 Author-Name: David M. McEvoy Author-Name-First: David Author-Name-Last: McEvoy Author-Email: mcevoydm@appstate.edu Author-Workplace-Name: Department of Economics, Appalachian State University Author-Name: James J. Murphy Author-Name-First: James Author-Name-Last: Murphy Author-Email: murphy@uaa.alaska.edu Author-Workplace-Name: Department of Economics, University of Alaska Anchorage Author-Name: John M. Spraggon Author-Name-First: John Author-Name-Last: Spraggon Author-Email: jmspragg@resecon.umass.edu Author-Workplace-Name: Department of Resource Economics, University of Massachusetts Amherst Author-Name: John K. Stranlund Author-Name-First: John Author-Name-Last: Stranlund Author-Email: stranlund@resecon.umass.edu Author-Workplace-Name: Department of Resource Economics, University of Massachusetts Amherst Title: The problem of maintaining compliance within stable coalitions: experimental evidence Abstract: This study examines the performance of stable cooperative coalitions that form to provide a public good when coalition members have the opportunity to violate their commitments. A stable coalition is one in which no member wishes to leave and no non-member wishes to join. To counteract the incentive to violate their commitments, coalition members fund a third-party enforcer. This leads to the theoretical conclusion that stable coalitions are larger, and provide more of a public good, when their members are responsible for financing enforcement. However, our experiments reveal that member-financed enforcement of compliance reduces the provision of the public good. The decrease is attributed to an increase in the participation threshold for a stable coalition to form and to significant levels of noncompliance. Provision of the public good increases significantly when we abandon the strict stability conditions and require all subjects to join a coalition for it to form. Creation-date: 2010-01 File-URL: http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA201002.pdf File-Format: Application/pdf Classification-JEL: C92, H41, C90, C70, C72, C73, F53, Q50, Q59 Keywords: lab experiments, voluntary compliance, international environmental agreements, experimental economics, environmental economics Publication-Status: Published in Oxford Economic Papers. 63(3):475-498. Number: 2010-02 Handle: RePEc:ala:wpaper:2010-02