"Punishments create a second level public good". This implies that:
A) Punishments are also a public good given that one now not only needs to cooperate and punish free-riders but may also need to punish non-punishers of free-riders.
B) Punishments are costly and therefore not easy to implement.
C) The cost benefit ratio of punishments is crucial and must be of the order of at least 1:3; i.e. it costs $1 to punish someone by $3 or more.
D) Punishments can only be successful in the very long term but not in the short-term.
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Correct Answer:
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