Natural Implementation with a Simple Punishment # by Tatsuyoshi Saijo* Yoshikatsu Tatamitani** and Takehiko Yamato*** August, 1994/Revised September, 1995 # We thank Stephen Turnbull, Wendy Williamson, and an anonymous referee of this journal for helpful comments. Research was partially supported by Grant in Aid for Research 04451111 and D7730011 of the Ministry of Education, Science, and Culture in Japan, the Japan Society for the Promotion of Science Fellowship, the Tokyo Center for Economic Research Grant, and the Zengin Foundation for the Studies on Economics and Finance. Part of this paper was written while the second author was visiting Department of Economics, University of Minnesota. He is thankful for their hospitality. * Institute of Socio-Economic Planning, University of Tsukuba, Tsukuba, Ibaraki 305, Japan, and Institute of Social and Economic Research, Osaka University, Ibaraki, Osaka 567, Japan ** Institute of Socio-Economic Planning, University of Tsukuba, Tsukuba, Ibaraki 305, Japan, and Department of Economics, University of Minnesota, Minneapolis, MN 55455, USA *** Faculty of Economics, Tokyo Metropolitan University, Hachioji, Tokyo 192-03, Japan Editorial Correspondence: Tatsuyoshi Saijo, Institute of Socio-Economic Planning, University of Tsukuba, Tsukuba, Ibaraki 305, Japan Phone 01181-298 (country & area codes) 53-5379 (office)/53-5579 (experimental lab.)/53-5182 (institute)/55-3849 (fax) E-mail: saijo@shako.sk.tsukuba.ac.jp 1