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Getting Punnishment Right: Do Costly Monitoring or Redustributive Punishment Help?

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Author Info
Talbot Page
Louis Putterman
Bruno Garcia

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Abstract

We introduce new treatments of a voluntary contribution mechanism with opportunities to punish, to see how contributions and punishments change when (a) each dollar lost in punishment must be awarded to another team member and/or when (b) obtaining information on individuals’ contributions is a costly choice. Conjectures that tying punishments to rewards might reduce punishment of high contributors (perverse punishment) or increase overall punishing are not completely born out, but innovation (a) nonetheless succeeds in making the net punishment of high contributors much less common because they receive enough rewards to offset punishment. A surprise finding is that innovation (b) also decreases the incidence of misdirected punishment, since high contributors do more monitoring than low ones while low contributors do most of the perverse punishing. Both innovations raise both contributions and earnings relative to the familiar VCM-with-punishment treatment.

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File URL: http://www.brown.edu/Departments/Economics/Papers/2008/2008-1_paper.pdf
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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2008-1.

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Date of creation: 2008
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Handle: RePEc:bro:econwp:2008-1

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Postal: Department of Economics, Brown University, Providence, RI 02912

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  1. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April. [Downloadable!] (restricted)
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  2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December. [Downloadable!] (restricted)
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  3. Nikos Nikiforakis, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Experimental 0403001, EconWPA. [Downloadable!]
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  4. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series 1042, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
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  5. 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. [Downloadable!] (restricted)
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  6. Josef Falkinger et al., 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March. [Downloadable!] (restricted)
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  7. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
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  8. Anabela Botelho & Glenn W. Harrison & Lígia Pinto & Elisabet E. Rutstrom, 2005. "Social norms and social choice," Working Papers 30, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho. [Downloadable!]
  9. Roberto Ricciuti, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Royal Holloway, University of London: Discussion Papers in Economics 04/06, Department of Economics, Royal Holloway University of London, revised Apr 2004. [Downloadable!]
  10. Jeffrey Carpenter & Peter Matthews, 2002. "Social Reciprocity," Middlebury College Working Paper Series 0229, Middlebury College, Department of Economics. [Downloadable!]
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  11. Astrid Hopfensitz & Ernesto Reuben, 2005. "The Importance of Emotions for the Effectiveness of Social Punishment," Tinbergen Institute Discussion Papers 05-075/1, Tinbergen Institute, revised 28 Mar 2006. [Downloadable!]
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  12. Martin Sefton & Robert Shupp & James M. Walker, 2006. "The Effect of Rewards and Sanctions in Provision of Public Goods," Caepr Working Papers 2006-005, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Aug 2006. [Downloadable!]
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  13. Casari, Marco & Plott, Charles R., 2003. "Decentralized management of common property resources: experiments with a centuries-old institution," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 217-247, June. [Downloadable!] (restricted)
  14. Sausgruber, Rupert & Tyran, Jean-Robert, 2007. "Pure redistribution and the provision of public goods," Economics Letters, Elsevier, vol. 95(3), pages 334-338, June. [Downloadable!] (restricted)
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  15. Matthias Cinyabuguma & Talbot Page & Louis Putterman, 2006. "Can second-order punishment deter perverse punishment?," Experimental Economics, Springer, vol. 9(3), pages 265-279, September. [Downloadable!] (restricted)
  16. Stefan Grosse & Louis Putterman & Bettina Rockenbach, 2007. "Monitoring In Teams: A Model and Experiment on the Central Monitor Hypothesis," Working Papers 2007-4, Brown University, Department of Economics. [Downloadable!]
  17. Matthias Cinyabuguma & Talbot Page & Louis Putterman, 2004. "On Perverse and Second-Order Punishment in Public Goods Experiments with Decentralized Sanctioning," Working Papers 2004-12, Brown University, Department of Economics. [Downloadable!]
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