Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?

In the public goods literature, there have been recently a number of experiments which demonstrate how the problem of the under-provision of a public good can be solved through mutual monitoring and sanctioning between the members of a group when antisocial behavior is observed. In many circumstances, however, we can not allow for punishment and exclude the possibility of counter-punishment occurring. We design a public goods experiment based on Fehr and Gaechter (2000) where we allow for both punishment and counter-punishment. We find that in both Partner and Stranger treatments average contributions decline steadily over time, at a rate similar to the treatment were no punishment was allowed, and tend towards full free-riding. The reason for this change seems to be that under the threat of counter-punishment people are less willing to punish. An important result is that participants squander their endowment in punishment and counter-punishment actions leading to a relative payoff loss, in comparison to the treatment without punishments.punishment, counter-punishment, public goods games, free- riding,

Does the Size of the Action Set Matter for Coorperation

We use the voluntary contribution mechanism to investigate whether smaller action sets lead to higher cooperation rates. We ?nd that this is the case for groups of four players.action set; voluntary contribution mechanism; prisoner?s dilemma

Mixing the Carrots with the Sticks: Are Punishment and Reward Substitutes

This paper presents evidence that the demand for costly norm enforcement can be affected by the availability of the means for enforcing the norm. Participants in a laboratory experiment can reward or punish to enforce a distribution norm. Controlling for the extent of norm violation, we find that demand for costly punishment is lower when participants also have the opportunity to reward norm adherence. Similarly, demand for costly reward is lower when participants can punish norm violations, controlling for the extent of norm adherence. The reason is that participants use reward and punishment to signal their approval and disapproval. The availability of reward opportunities allows them to signal their disapproval by withholding reward. Similarly, the availability of punishment opportunities allows them to signal their approval by withholding punishment. This suggests that individuals consider reward and punishment to be substitutes. The resultant reduction in costly enforcement does not affect adherence to the norm, but has a significant impact on earnings in the experiment.punishment; reward; social norms; norm enforcement; third party

Perfect and Imperfect Real-Time Monitoring in a Minimum-Effort Game

This paper presents the results from a minimum-effort game in which individuals can observe the choices of others in real time. We find that under perfect monitoring almost all groups coordinate at the payoff-dominant equilibrium. However, when individuals can only observe the actions of their immediate neighbors in a circle network, monitoring improves neither coordination nor efficiency relative to a baseline treatment without real-time monitoring. We argue that the inefficiency of imperfect monitoring is due to information uncertainty, that is, uncertainty about the interpretation of the information available regarding the actions of others.minimum effort game, information uncertainty, real time monitoring, circle network, cheap talk

Counterpunishment revisited: an evolutionary approach

Evolutionary game theory has shown that in environments characterised by a social-dilemma situation punishment may be an adaptive behaviour. Experimental evidence closely corresponds to this finding but yields contradictory results on the cooperation-enhancing effect of punishment if players are allowed to retaliate against their punishers. The present study sets out to examine the question of whether cooperation will still be part of an evolutionary stable strategy if we allow for counterpunishment opportunities in a theoretic model and tries to reconcile the seemingly contradictory findings from the laboratory. We find that the apparent contradictions can be explained by a difference in the number of retaliation stages employed (one vs many) and even small differences in the degree of retaliativeness.Public goods; Strong reciprocity; Conformism; Counter-punishment; Evolution of behavior

Can Real-Effort Investments Inhibit the Convergence of Experimental Markets?

Evidence shows that real-effort investments can affect bilateral bargaining outcomes. This paper investigates whether similar investments can inhibit equilibrium convergence of experimental markets. In one treatment, sellers’ relative effort affects the allocation of production costs, but a random productivity shock ensures that the allocation is not necessarily equitable. In another treatment, sellers’ effort increases the buyers’ valuation of a good. We find that effort investments have a short-lived impact on trading behavior when sellers’ effort benefits buyers, but no effect when effort determines cost allocation. Efficiency rates are high and do not differ across treatments.Property Rights; Real Effort; Posted Offer Markets; Random Shock; Surplus Creation

Normative Conflict & Feuds: The Limits of Self-Enforcement

A normative conflict arises when there exist multiple plausible norms of behavior. In such cases, norm enforcement can lead to a sequence of mutual retaliatory sanctions, which we refer to as a feud. We investigate the hypothesis that normative conflict enhances the likelihood of a feud in a public-good experiment. We find that punishment is much more likely to trigger counter-punishment and start a feud when there is a normative conflict, than in a setting in which no conflict exists. While the possibility of a feud sustains cooperation,the cost of feuding fully offsets the efficiency gains from increased cooperation.normative conflict; peer punishment; feuds; counter-punishment; social norms

Asymmetric Enforcement of Cooperation in a Social Dilemma

The imposition of sanctions is one of the most common means of enforcing cooperation in decentralized interactions. Typically, agents are asymmetric in the sense that each has a different sanctioning power. Using a public-good experiment we analyze such a decentralized punishment institution in which agents are asymmetric. The asymmetric punishment institution prevents the decay of cooperation towards the non-cooperative equilibrium level. Strong agents contribute less to the public good, but punish more than weak agents. At the aggregate level, we observe remarkable similarities between outcomes in asymmetric and symmetric punishment institutions.asymmetry, decentralized punishment, public good, punishment effectiveness

Surveillance cues do not enhance altruistic behavior among anonymous strangers in the field

The degree of altruistic behavior among strangers is an evolutionary puzzle. A prominent explanation is the evolutionary legacy hypothesis according to which an evolved reciprocity-based psychology affects behavior even when reciprocity is impossible, i.e., altruistic behavior in such instances is maladaptive. Empirical support for this explanation comes from laboratory experiments showing that surveillance cues, e.g., photographs of watching eyes, increase altruistic behavior. A competing interpretation for this evidence, however, is that the cues signal the experimenter’s expectations and participants, aware of being monitored, intentionally behave more altruistically to boost their reputation. Here we report the first results from a field experiment on the topic in which participants are unaware they are being monitored and reciprocity is precluded. The experiment investigates the impact of surveillance cues on a textbook example of altruistic behavior—hand hygiene prior to treating a ‘patient’. We find no evidence surveillance cues affect hand hygiene, despite using different measures of hand-hygiene quality and cues that have been previously shown to be effective. We argue that surveillance cues may have an effect only when participants have reasons to believe they are actually monitored. Thus they cannot support claims altruistic behavior between strangers is maladaptive