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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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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 79743.

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Date of creation: 2013
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Handle: RePEc:zbw:vfsc13:79743

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  1. Loukas Balafoutas & Nikos Nikiforakis, 2012. "1 Norm enforcement in the city: A natural field experiment," Natural Field Experiments 00385, The Field Experiments Website.
  2. Francesco GUALA, 2010. "Reciprocity: weak or strong? What punishment experiments do (and do not) demonstrate," Departmental Working Papers 2010-23, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  3. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
  4. Nikiforakis, Nikos & Noussair, Charles N. & Wilkening, Tom, 2012. "Normative conflict and feuds: The limits of self-enforcement," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 797-807.
  5. Masclet, D. & Noussair, C. & Tucker, S. & Villeval, M.C., 2001. "Monetary and Non-monetary Punishment in the Voluntary Contributions Mechanism," Purdue University Economics Working Papers 1141, Purdue University, Department of Economics.
  6. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
  7. Bochet, Olivier & Putterman, Louis, 2009. "Not just babble: Opening the black box of communication in a voluntary contribution experiment," European Economic Review, Elsevier, vol. 53(3), pages 309-326, April.
  8. R. M Isaac & J. Walker & A. Williams, 2010. "Group Size and the Voluntary Provision of Public Goods: Experimental Evidence Utilizing Very Large Groups," Levine's Working Paper Archive 11, David K. Levine.
  9. Nikos Nikiforakis & Hans-Theo Normann, 2008. "A comparative statics analysis of punishment in public-good experiments," Experimental Economics, Springer, vol. 11(4), pages 358-369, December.
  10. Ben Greiner, 2004. "The Online Recruitment System ORSEE - A Guide for the Organization of Experiments in Economics," Papers on Strategic Interaction 2003-10, Max Planck Institute of Economics, Strategic Interaction Group.
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  12. 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.
  13. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  14. Kristoffel Grechenig & Andreas Nicklisch & Christian Thöni, 2010. "Punishment despite Reasonable Doubt – A Public Goods Experiment with Uncertainty over Contributions," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_11, Max Planck Institute for Research on Collective Goods.
  15. Putterman, Louis & Tyran, Jean-Robert & Kamei, Kenju, 2011. "Public goods and voting on formal sanction schemes," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1213-1222, October.
  16. 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.
  17. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
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Cited by:
  1. Nikos Nikiforakis & Helen Mitchell, 2013. "Mixing the Carrots with the Sticks : Third Party Punishment and Reward," Working Papers 1338, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.

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