Non-Strategic Punishment when Monitoring is Costly: Experimental Evidence on Differences between Second and Third Party Behavior

This paper studies monitoring and punishment behavior by second and third parties in a cooperation experiment with endogenous information structures: Players are uninformed whether the target player cooperated or defected at the cooperation stage, but can decide to resolve the information imperfection at non-negative cost at the punishment stage. We examine how monitoring and punishment respond to changes in monitoring costs, and exploit the evidence to gain new insights about commonalities and differences between second and third party behavior. We establish three effects of positive monitoring costs relative to the zero-cost baseline and find that each one affects third parties differently than second parties: A «direct punishment cost effect» (the supply of non-strategic punishment decreases), a «blind punishment effect» (players punish without resolving the information imperfection) and a «diffusion effect» (defectors make up a smaller share of the punished and receive weaker punishment). The first effect affects third parties less, the other two more. As a result, third party punishment leads to increasingly weaker incentives for cooperation relative to second party punishment as monitoring costs rise. In addition, the differences between second and third parties suggest the presence of a «pure role effect»: Taking into account elicited beliefs and risk preferences, third parties punish differently from second parties, not just more weakly

On the Economics of Transparency and Cooperation

This thesis is about the relationship between transparency and cooperation. Fixing a particular group of individuals, the basic question can be posed as follows: What does the propensity of those individuals to cooperate with one another has to do with the availability of information they have about each others’ actions? I draw on a body of research on cooperation in game theory and experimental economics, that I review in the first two chapters around the specific focus posed. I contribute to the literature with five novel empirical studies, reported upon in the remaining chapters. The common point of depature is an endogenous conception of information structures. It is shown that this conception has significant empirical implications

Closing the Implementation Gap: Obstacles in Reaching Net-Zero Pledges in the EU and Germany

The European Union and Germany have recently committed themselves to greenhouse-gas neutrality by 2050 and 2045, respectively. This substantially reduces their gaps in ambition to the Paris climate goals. However, the current climate policy mix is not sufficient to reach these targets: There is a major implementation gap. Based on economic, legal, and political science perspectives, this article identifies key obstacles in legislating stringent climate policy instruments and making them effective. Using a simple framework, we map the stage of the process in which the obstacles are at work. Moreover, we discuss the potential effectiveness of a select list of prominent drivers of climate-related regulation in overcoming said obstacles and conclude by pointing towards conditions for closing the implementation gap. In doing so, we focus on the current legislative processes of the “Fit-for-55” package by the European Commission and the 2021 Federal Climate Change Act in Germany. Our analysis builds on the extant literature, and we suggest avenues for further research

Coordination and cooperation in asymmetric commons dilemmas: A replication study

Janssen et al. (Exp Econ 14:547–566, 2014) studied an asymmetric, finitely repeated common-pool resource dilemma with free-form communication in which subjects made decisions about investments in an infrastructure, and about extraction from a resource made available by this infrastructure. They found that infrastructure provision and joint payoffs converged to high levels because structurally advantaged head-enders tend to behave fairly by restricting themselves voluntarily at the extraction stage, and structurally disadvantaged “tail-enders” reciprocate by investing. This paper reports a fully independent, pre-registered, double-blind replication attempt conducted in a different lab, that also supplies elevated statistical power and adheres to the highest principles of scientific transparency and openness. We find that the key results of Janssen et al. not only re-appear qualitatively but are quantitatively and statistically strengthened. The conclusions drawn from the results are therefore robust, and the basic design can be confidently used for follow-up research

I'm in a hurry, I don't want to know! Strategic ignorance under time pressure

Data and materials for the paper "I'm in a hurry, I don't want to know! Strategic ignorance under time pressure

I'm in a hurry, I don't want to know! Strategic ignorance under time pressure

Information avoidance is common when privately beneficial choices have uncertain and potentially adverse effects on others. A dominant theory holds that such "strategic ignorance" allows decision makers to circumvent inner moral conflict while acting self-servingly. In extension of this theory, we hypothesize that time pressure elevates the prevalence of strategic ignorance. We conduct a laboratory experiment with resolvable payoff uncertainty to test this hypothesis. We find that time pressure indeed significantly increases the incidence of information avoidance. As a result, self-serving choices are more common than in a baseline without time pressure. We use supplementary data to explore several potential interpretations of this main finding. First, in a control condition, in which payoffs are fully transparent, time pressure has no direct effect on self-serving behavior. This speaks against a general tendency to act more self-servingly or fairly under time pressure. Second, a follow-up study shows that information avoidance under time pressure is due to conflict avoidance, rather than providing decision makers with a convenient excuse for not becoming informed. We discuss these observations in the context of a recent body of literature on the cognitive underpinnings of pro-social behavior and argue that they have significant implications for information-based approaches to public policy