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In the long-run we are all dead: On the benefits of peer punishment in rich environments

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  • Engelmann, Dirk
  • Nikiforakis, Nikos

Abstract

We investigate whether peer punishment is an efficient mechanism for enforcing cooperation in an experiment with a long time horizon. Previous evidence suggests that the costs of peer punishment can be outweighed by the benefits of higher cooperation, if (i ) there is a sufficiently long time horizon and (ii ) punishment cannot be avenged. However, in most instances in daily life, when individuals interact for an extended period of time, punishment can be retaliated. We use a design that imposes minimal restrictions on who can punish whom or when, and allows participants to employ a wide range of punishment strategies including retaliation of punishment. Similar to previous research, we find that, when punishment cannot be avenged, peer punishment leads to higher earnings relative to a baseline treatment without any punishment opportunities. However, in the more general setting, we find no evidence of group earnings increasing over time relative to the baseline treatment. Our results raise questions under what conditions peer punishment can be an efficient mechanism for enforcing cooperation.

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Bibliographic Info

Paper provided by University of Mannheim, Department of Economics in its series Working Papers with number 32651.

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Date of creation: 2012
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Handle: RePEc:mnh:wpaper:32651

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Keywords: altruistic punishment ; counter-punishment ; public good game ; feuds;

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  8. Nikiforakis, Nikos & Engelmann, Dirk, 2011. "Altruistic punishment and the threat of feuds," Journal of Economic Behavior & Organization, Elsevier, vol. 78(3), pages 319-332, May.
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  18. Nikos Nikiforakis & Charles N. Noussair & Tom Wilkening, 2011. "Normative Conflict & Feuds: The Limits of Self-Enforcement," Department of Economics - Working Papers Series 1120, The University of Melbourne.
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Cited by:
  1. Nikos Nikiforakis & Helen Mitchell, 2014. "Mixing the Carrots with the Sticks : Third Party Punishment and Reward," Working Papers halshs-00924995, HAL.

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