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Free-Riding on Altruistic Punishment? An Experimental Comparison of Third-Party Punishment in a Stand-Alone and in an In-Group Environment

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  • Lewisch Peter G.

    (University of Vienna; University of Milano – Bicocca; University of Eastern Piedmont)

  • Ottone Stefania

    (University of Vienna; University of Milano – Bicocca; University of Eastern Piedmont)

  • Ponzano Ferruccio

    (University of Vienna; University of Milano – Bicocca; University of Eastern Piedmont)

Abstract

While second-party punishment is suitable in small groups, third-party punishment is much more common in large societies, where it is generally recognized as a social norm enforcement device that may guarantee social stability. However, in large societies, the presence of a potential additional third-party punisher who observes the norm violation and decides to intervene becomes more probable. The question arises as to whether third-party punishment would be robust with respect to an enlargement of the pool of potential altruistic punishers, namely the introduction of a second potential punisher. The relevance of this question is evident because, should the case be that the presence of several potential third-party punishers activates free-riding attitudes, third-party punishment may decline or even collapse altogether. In our paper we compare, by means of an economic experiment, punishment by a single third party (the Stand-Alone case) with punishment by third parties (In-Group environment). Shifting punishment choices into this “enlarged environment” allows us to study, in a systematic way, the complex relationship between the punisher’s expectations about her/his peer’s punishment decisions and her/his own punishment choices. Our data suggest that individual punishers are heterogeneous as to their individual punishment characteristics and the presence of a second punisher affects their choices to a certain extent. Consequently, the implementation of voluntary punishment depends on the distribution of types within the population. This result allows both to put into discussion the extreme emphasis devoted to voluntary third-party punishment as the “golden cornerstone” of spontaneous social order and to explain why large developed societies need institutional legal systems as the root of stability.

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Article provided by De Gruyter in its journal Review of Law & Economics.

Volume (Year): 7 (2011)
Issue (Month): 1 (June)
Pages: 161-190

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Handle: RePEc:bpj:rlecon:v:7:y:2011:i:1:n:8

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  1. Ottone, Stefania, 2007. "Are people samaritans or avengers?," POLIS Working Papers 77, Institute of Public Policy and Public Choice - POLIS.
  2. Casari, Marco & Luini, Luigi, 2005. "Group Cooperation Under Alternative Peer Punishment Technologies: An Experiment," Purdue University Economics Working Papers 1176, Purdue University, Department of Economics.
  3. Ernst Fehr & Urs Fischbacher, . "Third Party Punishment and Social Norms," IEW - Working Papers 106, Institute for Empirical Research in Economics - University of Zurich.
  4. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  5. William M. Landes & Richard A. Posner, 1974. "The Private Enforcement of Law," NBER Working Papers 0062, National Bureau of Economic Research, Inc.
  6. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
  7. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
  8. Anderson, Christopher M. & Putterman, Louis, 2006. "Do non-strategic sanctions obey the law of demand? The demand for punishment in the voluntary contribution mechanism," Games and Economic Behavior, Elsevier, vol. 54(1), pages 1-24, January.
  9. repec:ebl:ecbull:v:3:y:2008:i:10:p:1-3 is not listed on IDEAS
  10. Ottone, Stefania, 2005. "Transfers and Altruistic Punishments in Solomon's Game experiments," POLIS Working Papers 50, Institute of Public Policy and Public Choice - POLIS.
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Cited by:
  1. Lotito, Gianna & Migheli, Matteo & Ortona, Guido, 2011. "Is cooperation instinctive? Evidence from the response times in a Public Goods Game," POLIS Working Papers 161, Institute of Public Policy and Public Choice - POLIS.
  2. Butler, Je rey V. & Conzo, Pierluigi & Leroch, Martin A., 2013. "Social Identity and Punishment," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201329, University of Turin.
  3. Marchese, Carla & Ramello, Giovanni B., 2010. "In the beginning was the Word. Now is the Copyright," POLIS Working Papers 140, Institute of Public Policy and Public Choice - POLIS.

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