Punishment and Cooperation in Stochastic Social Dilemmas
AbstractPrevious findings on punishment have focused on environments in which the outcomes are known with certainty. In this paper, we conduct experiments to investigate how punishment affects cooperation in a two-person stochastic prisoner’s dilemma environment where each person can decide whether or not to cooperate, and the outcomes of alternative strategies are specified probabilistically under a transparent information condition. In particular, we study two types of punishment mechanisms: 1) an unrestricted punishment mechanism: both persons can punish; and 2) a restricted punishment mechanism: only cooperators can punish non-cooperators. We show that the restricted punishment mechanism is more effective in promoting cooperative behavior than the unrestricted one in a deterministic social dilemma. More importantly, the restricted type is less effective in an environment where the outcomes are stochastic than when they are known with certainty. Our data suggest that one explanation is that non-cooperative behavior is less likely to be punished when there is outcome uncertainty. Our findings provide useful information for designing efficient incentive mechanisms to induce cooperation in a stochastic social dilemma environment.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18458.
Date of creation: Oct 2012
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Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-20 (All new papers)
- NEP-CDM-2012-10-20 (Collective Decision-Making)
- NEP-EVO-2012-10-20 (Evolutionary Economics)
- NEP-EXP-2012-10-20 (Experimental Economics)
- NEP-GTH-2012-10-20 (Game Theory)
- NEP-SOC-2012-10-20 (Social Norms & Social Capital)
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- Faillo, Marco & Grieco, Daniela & Zarri, Luca, 2013.
"Legitimate punishment, feedback, and the enforcement of cooperation,"
Games and Economic Behavior,
Elsevier, vol. 77(1), pages 271-283.
- Marco Faillo & Daniela Grieco & Luca Zarri, 2010. "Legitimate Punishment, Feedback, and the Enforcement of Cooperation," Working Papers 16/2010, University of Verona, Department of Economics.
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