Peer punishment with third-party approval in a social dilemma game

This paper investigates how punishment promotes cooperation when the punishment enforcer is a third party independent of the implicated parties who propose the punishment. In a prisoner's dilemma experiment, we find an independent third party vetoes not only punishment to the cooperators but punishment to the defectors as well. Compared with the case when the implicated parties are allowed to punish each other, both the cooperation rate and the earnings are lower when the enforcement of punishment requires approval from an independent third party.Social dilemmas; third party; punishment; cooperation; experiment

The reputation of punishers

Punishment is a potential mechanism to stabilise cooperation between self-regarding agents. Theoretical and empirical studies on the importance of a punitive reputation have yielded conflicting results. Here, we propose that a variety of factors interact to explain why a punitive reputation is sometimes beneficial and sometimes harmful. We predict that benefits are most likely to occur in forced play scenarios and in situations where punishment is the only means to convey an individual's cooperative intent and willingness to uphold fairness norms. By contrast, if partner choice is possible and an individual's cooperative intent can be inferred directly, then individuals with a nonpunishing cooperative reputation should typically be preferred over punishing cooperators

Observed Punishment Spillover Effects: A Laboratory Investigation Of Behavior In A Social Dilemma

Punishment has been shown to be an effective reinforcement mechanism. Intentional or not, punishment will likely generate spillover effects that extend beyond one’s immediate decision environment, and these spillovers are not as well understood. We seek to understand these secondary spillover effects in a controlled lab setting using a standard social dilemma: the voluntary contributions mechanism. We find that spillovers occur when others observe punishment outside their own social dilemma. However, the direction of the spillover effect depends crucially on personal punishment history and whether one is personally exempt from punishment or not

Justification and Legitimate Punishment

Punishment can lose its legitimacy if the enforcer can profit from delivering punishment. We use a controlled laboratory experiment to examine how justification can combat profit-seeking punishment and promote the legitimacy of punishment. In a one-shot sender-receiver game, an independent third party can punish the sender upon seeing whether the sender has told the truth. Most third parties punish the senders regardless of how the senders behave when they can profit from punishment. However, majority third parties punish the sender if and only if the sender lies when they have to provide explanations for their punishment decisions. Our data also suggests that senders are more likely to perceive punishment as legitimate and behave honestly when they know the enforcer has to justify their punishment decisions. Our findings suggest that justification requirement plays an important role in building efficient punishment institutions

Justification and Legitimate Punishment

Punishment can lose its legitimacy if the enforcer can profit from delivering punishment. We use a controlled laboratory experiment to examine how justification can combat profit-seeking punishment and promote the legitimacy of punishment. In a one-shot sender-receiver game, an independent third party can punish the sender upon seeing whether the sender has told the truth. Most third parties punish the senders regardless of how the senders behave when they can profit from punishment. However, majority third parties punish the sender if and only if the sender lies when they have to provide explanations for their punishment decisions. Our data also suggests that senders are more likely to perceive punishment as legitimate and behave honestly when they know the enforcer has to justify their punishment decisions. Our findings suggest that justification requirement plays an important role in building efficient punishment institutions

A Fine Rule From a Brutish World? An Experiment on Endogenous Punishment Institution and Trust

By means of a laboratory experiment, we study the impact of the endogenous adoption of a collective punishment mechanism within a one-shot binary trust game. The experiment comprises three games. In the first one, the only equilibrium strategy is not to trust, and not to reciprocate. In the second we exogenously introduce a sanctioning rule that imposes on untrustworthy second-movers a penalty proportional to the number of those who reciprocate trust. This generates a second equilibrium where everybody trusts and reciprocates. In the third game, the collective punishment mechanism is adopted through majority-voting. In line with the theory, we find that the exogenous introduction of the punishment mechanism significantly increases trustworthiness, and to a lesser extent also trust. However, in the third game the majority of subjects vote against it: subjects seem to be unable to endogenously adopt an institution which, when exogenously imposed, proves to be efficiency enhancing

A fine rule from a brutish world? An experiment on endogenous punishment institution and trust

By means of a laboratory experiment, we study the impact of the endogenous adoption of a collective punishment mechanism within a one-shot binary trust game. The experiment comprises three games. In the first one, the only equilibrium strategy is not to trust, and not to reciprocate. In the second we exogenously introduce a sanctioning rule that imposes on untrustworthy second-movers a penalty proportional to the number of those who reciprocate trust. This generates a second equilibrium where everybody trusts and reciprocates. In the third game, the collective punishment mechanism is adopted through majority-voting. In line with the theory, we find that the exogenous introduction of the punishment mechanism significantly increases trustworthiness, and to a lesser extent also trust. However, in the third game the majority of subjects vote against it: subjects seem to be unable to endogenously adopt an institution which, when exogenously imposed, proves to be efficiency enhancing

Punishment and Cooperation in Stochastic Social Dilemmas

Previous findings on punishment have focused on deterministic environments in which the outcomes are known with certainty. In this article, we conduct experiments to investigate how punishment affects cooperation in stochastic social dilemmas where each person can decide whether to cooperate, when the outcomes of alternative strategies are specified probabilistically. Two types of punishment mechanisms are studied: (1) an unrestricted punishment mechanism—both persons can punish—and (2) a restricted punishment mechanism—only cooperators can punish noncooperators. We compare behavior in a two-person deterministic prisoner’s dilemma game (DPD) with a two-person stochastic prisoner’s dilemma (SPD). In all treatments, participants are given information on the other person’s actions. We find that in both games, the restricted punishment mechanism promotes more cooperative behavior than unrestricted punishment. However, the difference in the degree of effectiveness between the two mechanisms is smaller in the SPD game than in the DPD game because noncooperative behavior is less likely to be punished when there is outcome uncertainty. Our findings provide useful information for designing efficient incentive mechanisms to induce cooperation in a stochastic social dilemma environment

Punishment is strongly motivated by revenge and weakly motivated by inequity aversion

There are two broad functional explanations for second-party punishment: fitness-leveling and deterrence. The former suggests that people punish to reduce fitness differences, while the latter suggests that people punish in order to reciprocate losses and deter others from inflicting losses on them in the future. We explore the relative roles of these motivations using a pre-registered, two-player experiment with 2426 US participants from Amazon Mechanical Turk. Participants played as the “responder” and were assigned to either a Take or Augment condition. In the Take condition, the “partner” could steal money from the responder's bonus or do nothing. In the Augment condition, the partner could augment the responder's bonus by giving them money at no cost to themselves or do nothing. We also manipulated the responders' starting endowments, such that after the partner's decision, responders experienced different payoff outcomes: advantageous inequity, equality, or varying degrees of disadvantageous inequity. Responders then decided whether to pay a cost to punish the partner. Punishment was clearly influenced by theft and was most frequent when theft resulted in disadvantageous inequity. However, people also punished in the absence of theft, particularly when confronted with disadvantageous inequity. While the effect of inequity on punishment was small, our results suggest that punishment is motivated by more than just the desire to reciprocate losses. These findings highlight the multiple motivations undergirding punishment and bear directly on functional explanations for the existence of punishment in human societies

Punishment and disclosure probabilities in an experimental deception game

XXXII Jornadas de Economía Industrial. Pamplona, 7-8 septiembre, 2017Previous findings have shown tha t punishment does not necessarily reduce deception i n principal agent - relationships . We shed further light on this issue by first identifying a punishment mechanism that substantially decreases deception in a sender - receiver game: the possibility of imposing severe sanctions that are cost - free for the enforcer. Keeping this effective combination of punishment costs and severity constant , we then investigate how a reduction in monitoring affects deception by c ompar ing assured revelation of s ender behavior ex post with a treatment in which it is disclosed with just 50% probability . We find a similarly strong deterrence effect in both treatments suggesting that punishment works in a part icular way in the deception context: o nce it is a credible threat, it does not require complete monit oring to be effective . We also find that receivers show s imilar trust level s in senders’ messages for both punishment treatments , which are significantly higher than in the corresponding baseline s without sanctions , further support ing ou r conclusion