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Immaterial Rewards And Sanctions In A Voluntary Contribution Experiment

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  • RONALD PEETERS
  • MARC VORSATZ

Abstract

In this paper, we compare the cause and effect of immaterial rewards and sanctions oncooperation in a voluntary contributions experiment. We find that both rewards andsanctions increase contributions only when subjects interact repeatedly, though rewardsseem to be more effective than sanctions. Moreover, in contrast to sanctions, rewards dohave an impact on future contributions. Although the direct effect is negative, there is apositive indirect effect that applies to subjects who contribute above (below) the groupaverage in a partner (stranger) matching. From this we conclude that sanctions andrewards are mainly used as a communication channel to coordinate on a more efficientoutcome. Nevertheless, subjects also seem to experience additional utility from receivingapproval, whereas they are insensitive to disapprovals.
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  • Ronald Peeters & Marc Vorsatz, 2013. "Immaterial Rewards And Sanctions In A Voluntary Contribution Experiment," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1442-1456, April.
  • Handle: RePEc:bla:ecinqu:v:51:y:2013:i:2:p:1442-1456
    DOI: j.1465-7295.2011.00433.x
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    File URL: http://hdl.handle.net/10.1111/j.1465-7295.2011.00433.x
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    1. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    2. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
    3. Jeannette Brosig & Joachim Weimann & Axel Ockenfels, 2003. "The Effect of Communication Media on Cooperation," German Economic Review, Verein für Socialpolitik, vol. 4(2), pages 217-241, May.
    4. Bochet, Olivier & Page, Talbot & Putterman, Louis, 2006. "Communication and punishment in voluntary contribution experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 11-26, May.
    5. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October.
    6. Ellingsen, Tore & Johannesson, Magnus, 2007. "Anticipated verbal feedback induces altruistic behavior," SSE/EFI Working Paper Series in Economics and Finance 668, Stockholm School of Economics.
    7. Charles Noussair & Steven Tucker, 2005. "Combining Monetary and Social Sanctions to Promote Cooperation," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 649-660, July.
    8. Sonnemans, Joep & Schram, Arthur & Offerman, Theo, 1999. "Strategic behavior in public good games: when partners drift apart," Economics Letters, Elsevier, vol. 62(1), pages 35-41, January.
    9. repec:cup:apsrev:v:86:y:1992:i:02:p:404-417_08 is not listed on IDEAS
    10. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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    Cited by:

    1. repec:cai:recosp:reco_pr3_0095 is not listed on IDEAS
    2. Adam Zylbersztejn, 2013. "Strategic signaling or emotional sanctioning? An experimental study of ex post communication in a repeated public goods game," Documents de travail du Centre d'Economie de la Sorbonne 13011, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Adam Zylbersztejn, 2015. "Nonverbal Feedback, Strategic Signaling, and Nonmonetary Sanctioning: New Experimental Evidence from a Public Goods Game," Research in Experimental Economics,in: Replication in Experimental Economics, volume 18, pages 153-181 Emerald Publishing Ltd.
    4. Davide Dragone & Fabio Galeotti & Raimondello Orsini, 2017. "Non-Monetary Feedback Induces More Cooperation: Students and Workers in a Voluntary Contribution Mechanism," Revue économique, Presses de Sciences-Po, vol. 68(5), pages 793-808.
    5. Charness, Gary & Cobo-Reyes, Ramón & Sánchez, Ángela, 2016. "The effect of charitable giving on workers’ performance: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 61-74.
    6. Sven Christens & Astrid Dannenberg & Florian Sachs, 2017. "Identification of individuals and groups in a public goods experiment," MAGKS Papers on Economics 201755, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. López-Pérez, Raúl & Vorsatz, Marc, 2010. "On approval and disapproval: Theory and experiments," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 527-541, August.
    8. Matteo Rizzolli & James Tremewan, 2016. "Hard Labour in the lab: Are monetary and non-monetary sanctions really substitutable?," Vienna Economics Papers 1606, University of Vienna, Department of Economics.
    9. Adam Zylbersztejn, 2014. "The predominant role of signal precision in experimental beauty contests," Working Papers 1443, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

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