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Whom to blame? An experiment of collective harming and punishing

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Author Info

  • Werner Güth

    ()
    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Hironori Otsubo

    ()
    (Soka University, Faculty of Economics)

Abstract

In a situation, where it is efficient for one of two parties to pollute but highly inefficient if both parties do so, the harmed third party can freely impose its damage claims on both parties what crucially determines which equilibrium to expect. Whereas "equality before the law" requires equal punishments, efficient equilibria are predicted when holding one party responsible and letting the other escape punishment. After discussing equilibrium selection for the game, we report on an experiment with two treatment variables: one that determines when the harmed party announces its potential damage claims and one varying a game- and justice-unrelated difference between the two culprits. According to our experimental data, "equality before the law" dominates but is weakened by asymmetry in wealth and the possibility to announce sanctions.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-046.

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Date of creation: 14 Oct 2011
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Handle: RePEc:jrp:jrpwrp:2011-046

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Related research

Keywords: Law and economics; Equality vs. efficiency; Equilibrium selection; Laboratory experiments;

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References

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  1. repec:wop:humbsf:2001-11 is not listed on IDEAS
  2. Werner Güth & Hartmut Kliemt & Axel Ockenfels, . "Retributive Responses," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2002-41, Max Planck Institute of Economics, Strategic Interaction Group.
    • Güth, Werner & Kliemt, Hartmut & Ockenfels, Axel, 2001. "Retributive responses," SFB 373 Discussion Papers 2001,11, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  4. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1812, C.E.P.R. Discussion Papers.
  5. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262582384, December.
  6. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, American Economic Association, vol. 90(1), pages 166-193, March.
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Cited by:
  1. Fangfang Tan & Erte Xiao, 2014. "Third-Party Punishment: Retribution or Deterrence?," Working Papers, Max Planck Institute for Tax Law and Public Finance tax-mpg-rps-2014-05, Max Planck Institute for Tax Law and Public Finance.

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