Whom to blame? An experiment of collective harming and punishing
AbstractIn 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 InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-046.
Date of creation: 14 Oct 2011
Date of revision:
Law and economics; Equality vs. efficiency; Equilibrium selection; Laboratory experiments;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- K00 - Law and Economics - - General - - - General (including Data Sources and Description)
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