Institutional preferences, social preferences and cooperation: Evidence from a lab-in-the-field experiment in rural China

We examine institutional preferences, social preferences, contribution in public goods games, and their relationships by conducting a lab-in-the-field experiment in rural China. Specifically, we examine whether people contribute differently depending on whether they are facing their preferred enforcement institution (punishment versus reward); that is, whether there is an institutional match or mismatch effect on cooperation. We also examine what factors are behind their institutional preferences. We find that most subjects prefer reward over punishment. However, institutional (mis)match does not have significant impacts on contributions in the public goods game. Moreover, subjects who prefer punishment tend to be free-riders. We further find that there is a robust relationship between the preference for punishment and certain efficiency-reducing social preference profiles, such as anti-social preferences, which may help understand the institutional preferences.