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Social norms, third-party observation and third-party reward

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  • Matthias Sutter

    ()

  • Peter Lindner

    ()

  • Daniela Platsch

    ()

Abstract

This paper examines the influence of third-party observation and third-party reward on behavior in an experimental prisoner?s dilemma (PD) game. Whereas the existing literature on third-party intervention as a means to sustain social norms has dealt almost exclusively with third-party punishment, we show that both third-party observation and third-party reward have positive effects on cooperation rates, compared to a treatment where no third party is involved. Third-party reward is more effective in increasing cooperation than third-party observation. However, rewards are given too late to prevent a steady downward trend of cooperation rates.

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File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2009-08.pdf
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Bibliographic Info

Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2009-08.

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Length: 25
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:inn:wpaper:2009-08

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Keywords: Social norms; third-party reward; third-party observation; prisoner?s dilemma experiment;

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  1. Gary Charness & Ramón Cobo-Reyes & Natalia Jiménez, 2006. "An investment game with third-party intervention," ThE Papers, Department of Economic Theory and Economic History of the University of Granada. 06/13, Department of Economic Theory and Economic History of the University of Granada..
  2. James M. Walker & Matthew A. Halloran, 2004. "Rewards and Sanctions and the Provision of Public Goods in One-Shot Settings," Experimental Economics, Springer, Springer, vol. 7(3), pages 235-247, October.
  3. Jeffrey Carpenter & Peter Hans Matthews, 2005. "Norm Enforcement: Anger, Indignation or Reciprocity?," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0503, Middlebury College, Department of Economics.
  4. Herbert Gintis, 2000. "Strong Reciprocity and Human Sociality," UMASS Amherst Economics Working Papers, University of Massachusetts Amherst, Department of Economics 2000-02, University of Massachusetts Amherst, Department of Economics.
  5. Jeffrey Carpenter & Peter Hans Matthews, 2004. "Social Reciprocity," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0229r, Middlebury College, Department of Economics.
  6. Ernst Fehr & Urs Fischbacher, 2004. "Third-party punishment and social norms," Experimental, EconWPA 0409002, EconWPA.
  7. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October.
  8. Rupert Sausgruber, 2009. "A note on peer effects between teams," Experimental Economics, Springer, Springer, vol. 12(2), pages 193-201, June.
  9. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, American Economic Association, vol. 76(4), pages 728-41, September.
  10. Turillo, Carmelo Joseph & Folger, Robert & Lavelle, James J. & Umphress, Elizabeth E. & Gee, Julie O., 2002. "Is virtue its own reward? Self-sacrificial decisions for the sake of fairness," Organizational Behavior and Human Decision Processes, Elsevier, Elsevier, vol. 89(1), pages 839-865, September.
  11. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
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