Carry a big stick, or no stick at all An experimental analysis of trust and capacity of punishment
AbstractWe investigate the effect of punishment in a trust game with endowment heterogeneity in which the investor may punish the allocator at a cost. Our results indicate that the effect of the punishment crucially depends on the investor’s capacity of punishment, that is measured in our experiment by the proportion of the allocator’s payoffs that the investor can destroy. We find that punishment fosters trust when the capacity of punishment is high (i.e., when the cost of punishing is relatively low). Otherwise, punishment fails to promote trusting behavior, crowding out intrinsic motivation to trust. Trustworthiness is higher with punishment than without punishment, except if investors have a high capacity of punishment
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Valencia, ERI-CES in its series Discussion Papers in Economic Behaviour with number 0413.
Date of creation: Aug 2013
Date of revision:
Trust game; punishment; crowding-out; intrinsic and extrinsic motivation; experimental economics;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D69 - Microeconomics - - Welfare Economics - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-10 (All new papers)
- NEP-CBE-2013-08-10 (Cognitive & Behavioural Economics)
- NEP-EVO-2013-08-10 (Evolutionary Economics)
- NEP-EXP-2013-08-10 (Experimental Economics)
- NEP-GTH-2013-08-10 (Game Theory)
- NEP-HRM-2013-08-10 (Human Capital & Human Resource Management)
- NEP-SOC-2013-08-10 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charness, Gary & Dufwenberg, Martin, 2003.
"Promises & Partnership,"
Research Papers in Economics
2003:3, Stockholm University, Department of Economics.
- Charness, Gary B & Dufwenberg, Martin, 2006. "Promises & Partnership," University of California at Santa Barbara, Economics Working Paper Series qt0127h86v, Department of Economics, UC Santa Barbara.
- David Masclet & Laurent Denant-Boèmont & Charles Noussair, 2006.
"Punishment, Counterpunishment and Sanction Enforcement in a Social Dilemma Experiment,"
- Laurent Denant-Boemont & David Masclet & Charles Noussair, 2007. "Punishment, counterpunishment and sanction enforcement in a social dilemma experiment," Economic Theory, Springer, vol. 33(1), pages 145-167, October.
- Denant-Boemont, L. & Masclet, D. & Noussair, C.N., 2007. "Punishment, counterpunishment, and sanction enforcement in a social dilemma experiment," Open Access publications from Tilburg University urn:nbn:nl:ui:12-284310, Tilburg University.
- Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer, vol. 14(1), pages 47-83, March.
- Gneezy, U. & Rustichini, A., 1998.
"Pay Enough - Or Don't Pay at All,"
1998-57, Tilburg University, Center for Economic Research.
- Roland Benabou & Jean Tirole, 2003.
"Intrinsic and Extrinsic Motivation,"
Review of Economic Studies,
Wiley Blackwell, vol. 70(3), pages 489-520, 07.
- Dufwenberg, Martin & Kirchsteiger, Georg, 2004.
"A theory of sequential reciprocity,"
Games and Economic Behavior,
Elsevier, vol. 47(2), pages 268-298, May.
- Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
- Georg Kirchsteiger & Martin Dufwenberg, 2004. "A theory of sequential reciprocity," ULB Institutional Repository 2013/5899, ULB -- Universite Libre de Bruxelles.
- Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine.
- Scheinkman, Jose A. & Soutter, Christine L. & Glaeser, Edward Ludwig & Laibson, David I., 2000.
4481497, Harvard University Department of Economics.
- Johansson-Stenman, Olof & Mahmud, Minhaj & Martinsson, Peter, 2005.
"Does stake size matter in trust games?,"
Elsevier, vol. 88(3), pages 365-369, September.
- Daniel Houser & Erte Xiao & Kevin McCabe & Vernon Smith, 2005.
"When punishment fails: Research on sanctions, intentions and non- cooperation,"
- Houser, Daniel & Xiao, Erte & McCabe, Kevin & Smith, Vernon, 2008. "When punishment fails: Research on sanctions, intentions and non-cooperation," Games and Economic Behavior, Elsevier, vol. 62(2), pages 509-532, March.
- Daniel Houser & Erte Xiao & Kevin McCabe & Vernon Smith, 2005. "When Punishment Fails: Research on Sanctions, Intentions and Non- Cooperation," Experimental 0502001, EconWPA, revised 18 Feb 2005.
- Rabin, Matthew, 1993.
"Incorporating Fairness into Game Theory and Economics,"
American Economic Review,
American Economic Association, vol. 83(5), pages 1281-1302, December.
- M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
- Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
- Charness, Gary & Cobo-Reyes, Ramón & Jiménez, Natalia, 2008.
"An investment game with third-party intervention,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 68(1), pages 18-28, October.
- Gary Charness & Ramón Cobo-Reyes & Natalia Jiménez, 2006. "An investment game with third-party intervention," ThE Papers 06/13, Department of Economic Theory and Economic History of the University of Granada..
- Charness, Gary B & Cobo-Reyes, RamÃ³n & JimÃ©nez, Natalia, 2007. "An investment game with third-party intervention," University of California at Santa Barbara, Economics Working Paper Series qt7qg338r3, Department of Economics, UC Santa Barbara.
- Tore Ellingsen & Magnus Johannesson, 2008.
"Pride and Prejudice: The Human Side of Incentive Theory,"
American Economic Review,
American Economic Association, vol. 98(3), pages 990-1008, June.
- Ellingsen, Tore & Johannesson, Magnus, 2006. "Pride and Prejudice: The Human Side of Incentive Theory," CEPR Discussion Papers 5768, C.E.P.R. Discussion Papers.
- Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
- Gneezy, Uri & Rustichini, Aldo, 2000.
"A Fine is a Price,"
The Journal of Legal Studies,
University of Chicago Press, vol. 29(1), pages 1-17, January.
- Ernst Fehr & Bettina Rockenbach, 2003. "Detrimental effects of sanctions on human altruism," Microeconomics 0305007, EconWPA.
- Johnson, Noel D. & Mislin, Alexandra A., 2011. "Trust games: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 865-889.
- Olcina Vauteren Gonzalo & Calabuig Alcántara Vicente, 2008. "Cultural transmission and the evolution of trust and reciprocity in the labor market," Working Papers 201070, Fundacion BBVA / BBVA Foundation.
- Nikos Nikiforakis & Hans-Theo Normann, 2008.
"A comparative statics analysis of punishment in public-good experiments,"
Springer, vol. 11(4), pages 358-369, December.
- Nikos Nikiforakis & Hans-Theo Normann, 2005. "A Comparative Statics Analysis of Punishment in Public-Good Experiments," Royal Holloway, University of London: Discussion Papers in Economics 05/07, Department of Economics, Royal Holloway University of London, revised Jun 2005.
- Gary Charness & Martin Dufwenberg, 2004.
"Promises and Partnership,"
122247000000000001, UCLA Department of Economics.
- Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
- Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
- Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
- Pierpaolo Battigalli & Martin Dufwenberg, 2007. "Guilt in Games," American Economic Review, American Economic Association, vol. 97(2), pages 170-176, May.
- Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Ananish Chaudhuri & Lata Gangadharan, 2007. "An Experimental Analysis of Trust and Trustworthiness," Southern Economic Journal, Southern Economic Association, vol. 73(4), pages 959â985, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emilio Calvo Ramón).
If references are entirely missing, you can add them using this form.