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Punishment, inequality, and welfare : a public good experiment

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Author Info

  • David Masclet

    (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - Université du Québec à Montréal)

  • Marie-Claire Villeval

    (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines, IZA - Institute for the Study of Labor - Institute for the Study of Labor IZA)

Abstract

This paper reports the results of an experiment that investigates the relationships between inequality and punishment. In particular, we analyze how inter-personal comparisons affect altruistic punishment behavior. In addition, we examine how punishment affects inequality over time. We compare two treatments of a two-stage public good game, one in which costly punishment reduces the immediate payoff inequality between the punisher and the target, and one in which it does not affect the current level of inequality. Our results indicate that subjects punish even when they cannot alter the current distribution of payoffs. We find however that in both treatments, the intensity of punishment increases in the level of inequality. Finally, despite its cost, we show that punishment improves welfare in association with a decrease in the level of inequality over time.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00196567.

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Date of creation: 2008
Date of revision:
Publication status: Published, Social Choice and Welfare, 2008, 31, 3, 475-502
Handle: RePEc:hal:journl:halshs-00196567

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00196567/en/
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Related research

Keywords: public good experiment ; punishment ; inequality aversion ; free-riding ; welfare;

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References

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  1. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  2. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
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  6. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  7. 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.
  8. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April.
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  12. 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.
  13. Martijn Egas & Arno Riedl, 2005. "The Economics of Altruistic Punishment and the Demise of Cooperation," Tinbergen Institute Discussion Papers 05-065/1, Tinbergen Institute.
  14. Samuel Bowles & Herbert Gintis, 1998. "The Evolution of Strong Reciprocity," Research in Economics 98-08-073e, Santa Fe Institute.
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  16. Astrid Hopfensitz & Ernesto Reuben, 2009. "The Importance of Emotions for the Effectiveness of Social Punishment," Economic Journal, Royal Economic Society, vol. 119(540), pages 1534-1559, October.
  17. Peter Matthews & Jeffrey Carpenter, 2002. "Why Punish: Social Reciprocity and the Enforcement of Prosocial Norms," Middlebury College Working Paper Series 0213, Middlebury College, Department of Economics.
  18. Brown, Gordon D. A. & Gardner, Jonathan & Oswald, Andrew J. & Qian, Jing, 2005. "Does Wage Rank Affect Employees' Wellbeing?," IZA Discussion Papers 1505, Institute for the Study of Labor (IZA).
  19. Carpenter, Jeffrey P., 2007. "Punishing free-riders: How group size affects mutual monitoring and the provision of public goods," Games and Economic Behavior, Elsevier, vol. 60(1), pages 31-51, July.
  20. Armin Falk & Ernst Fehr & Urs Fischbacher, 2005. "Driving Forces Behind Informal Sanctions," Econometrica, Econometric Society, vol. 73(6), pages 2017-2030, November.
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  25. Louis Putterman & Christopher M. Anderson, 2003. "Do Non-strategic Sanctions Obey the Law of Demand? The Demand for Punishment in the Voluntary Contribution Mechanism," Working Papers 2003-15, Brown University, Department of Economics.
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Citations

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Cited by:
  1. Falk, Armin & Meier, Stephan & Zehnder, Christian, 2011. "Did We Overestimate the Role of Social Preferences? The Case of Self-Selected Student Samples," IZA Discussion Papers 5475, Institute for the Study of Labor (IZA).
  2. Charness, Gary & Masclet, David & Villeval, Marie Claire, 2012. "The Dark Side of Competition for Status," University of California at Santa Barbara, Economics Working Paper Series qt1vr4g446, Department of Economics, UC Santa Barbara.
  3. Simon Gaechter & Benedikt Herrmann, 2008. "Reciprocity, culture, and human cooperation: Previous insights and a new cross-cultural experiment," Discussion Papers 2008-14, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  4. Oechssler, Jörg, 2011. "Finitely repeated games with social preferences," Working Papers 0512, University of Heidelberg, Department of Economics.
  5. Barmettler, Franziska & Fehr, Ernst & Zehnder, Christian, 2011. "Big Experimenter Is Watching You! Anonymity and Prosocial Behavior in the Laboratory," IZA Discussion Papers 5925, Institute for the Study of Labor (IZA).
  6. Haoran He & Marie Claire Villeval, 2014. "Are teams less inequality averse than individuals?," Working Papers halshs-00996545, HAL.
  7. Daniele Nosenzo & Martin Sefton, 2012. "Promoting Cooperation: the Distribution of Reward and Punishment Power," Discussion Papers 2012-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  8. Reuben Ernesto & Riedl Arno, 2009. "Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations," Research Memorandum 029, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  9. Christoph Engel, 2013. "Deterrence by Imperfect Sanctions – A Public Good Experiment," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2013_09, Max Planck Institute for Research on Collective Goods.
  10. Andrew E. Clark & Conchita D'Ambrosio, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," PSE Working Papers halshs-00967938, HAL.

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