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Punishment with Uncertain Outcomes in the Prisoner’s Dilemma

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  • Peter Duersch

    ()
    (Department of Economics, Universität Heidelberg)

  • Maroš Servátka

    ()
    (Department of Economics and Finance, University of Canterbury)

Abstract

This paper experimentally investigates whether risk-averse individuals punish less if the outcome of punishment is uncertain than when it is certain. Our design includes three treatments: Baseline in which the one-shot prisoner’s dilemma game is played; Certain Punishment in which the prisoner’s dilemma game is followed by a punishment stage allowing subjects to decrease the other player’s payoff by 2 Euros; and Uncertain Punishment in which subjects could decrease the other player’s payoff with a 50% probability by 1 Euro and with a 50% probability by 3 Euros. We find that in all cases the risk-averse subjects are equally likely to cooperate in the prisoner’s dilemma and equally likely to punish in the second stage in either of the two punishment treatments.

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Bibliographic Info

Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0485.

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Length: 24 pages
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:awi:wpaper:0485

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Keywords: experiment; prisoner’s dilemma; punishment; risk aversion; uncertainty;

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