The third part, Chapter 6, offers an example of how heterogeneous players affect institutional choices. If players with various costs in cooperation have the opportunity to select an institution that governs them, will they vote for the most efficient institutions? The answer is that it is much...

We consider a voluntary contributions game, in which players may punish others after contributions are made and observed. The productivity of contributions, as captured in the marginal-per-capita return, differs among individuals, so that there are two types: high and low productivity. Every two...