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The economics of altruistic punishment and the demise of cooperation

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  • Martijn Egas
  • Arno Riedl

Abstract

Explaining the evolution and maintenance of cooperation among unrelated individuals is one of the fundamental problems in biology and the social sciences. Recent experimental evidence suggests that altruistic punishment is an important mechanism to maintain cooperation among humans. In this paper we explore the boundary conditions for altruistic punishment to maintain cooperation by systematically varying the cost and impact of punishment, using a subject pool which extends beyond the standard student population. We find that the economics of altruistic punishment lead to the demise of cooperation when punishment is relatively expensive and/or has low impact. Our results indicate that the 'decision to punish' comes from an amalgam of emotional response and cognitive cost-benefit analysis. Additionally, earnings are lowest when punishment promotes cooperation, suggesting that the scope for altruistic punishment as a means to maintain cooperation is limited."

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File URL: http://karlan.yale.edu/fieldexperiments/papers/00040.pdf
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Paper provided by The Field Experiments Website in its series Artefactual Field Experiments with number 00040.

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Date of creation: 2005
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Handle: RePEc:feb:artefa:00040

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  1. Ernst Fehr & Urs Fischbacher, 2004. "The nature of human altruism," Experimental 0402003, EconWPA.
  2. Nowak, Martin & Sasaki, Akira & Taylor, Christine & Fudenberg, Drew, 2004. "Emergence of Cooperation and Evolutionary Stability in Finite Populations," Scholarly Articles 3196331, Harvard University Department of Economics.
  3. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  4. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  5. Michael Kosfeld & Arno Riedl, 2004. "The Design of (De)centralized Punishment Institutions for Sustaining Co-operation," Tinbergen Institute Discussion Papers 04-025/1, Tinbergen Institute.
  6. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and non Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00175251, HAL.
  7. Ronald Bosman & Frans van Winden, 2002. "Emotional Hazard in a Power-to-take Experiment," Economic Journal, Royal Economic Society, vol. 112(476), pages 147-169, January.
  8. Ernst Fehr & Bettina Rockenbach, 2003. "Detrimental effects of sanctions on human altruism," Microeconomics 0305007, EconWPA.
  9. Ernst Fehr & Simon Gaechter, 2003. "Altruistic Punishment in Humans," Microeconomics 0305006, EconWPA.
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