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Profit-seeking punishment corrupts norm obedience

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  • Xiao, Erte

Abstract

Punishment typically involves depriving violators of resources they own such as money or labor. These resources can become revenue for authorities and thus motivate profit-seeking punishment. In this paper, we design a novel experiment to provide direct evidence on the role punishment plays in communicating norms. Importantly, this allows us to provide experimental evidence indicating that if people know that enforcers can benefit monetarily by punishing, they no longer view punishment as signaling a norm violation. The result is a substantial degradation of punishmentʼs ability to influence behavior. Our findings draw attention to the detrimental effect of profit-seeking enforcement on the efficacy of punishment.

Suggested Citation

  • Xiao, Erte, 2013. "Profit-seeking punishment corrupts norm obedience," Games and Economic Behavior, Elsevier, vol. 77(1), pages 321-344.
  • Handle: RePEc:eee:gamebe:v:77:y:2013:i:1:p:321-344
    DOI: 10.1016/j.geb.2012.10.010
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    Cited by:

    1. 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.
    2. Galbiati, Roberto & Schlag, Karl H. & van der Weele, Joël J., 2013. "Sanctions that signal: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 34-51.
    3. Roland Benabou & Jean Tirole, 2011. "Laws and Norms," NBER Working Papers 17579, National Bureau of Economic Research, Inc.
    4. Fangfang Tan & Erte Xiao, 2014. "Third-Party Punishment: Retribution or Deterrence?," Working Papers tax-mpg-rps-2014-05, Max Planck Institute for Tax Law and Public Finance.
    5. Donna Harris & Benedikt Herrmann & Andreas Kontoleon & Jonathan Newton, 2015. "Is it a norm to favour your own group?," Experimental Economics, Springer;Economic Science Association, vol. 18(3), pages 491-521, September.
    6. repec:eee:joepsy:v:61:y:2017:i:c:p:55-73 is not listed on IDEAS
    7. Natalia Borzino & Enrique Fatas & Emmanuel Peterle, 2015. "In Gov we trust: Voluntary compliance in networked investment games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-21, School of Economics, University of East Anglia, Norwich, UK..
    8. Erte Xiao & Fangfang Tan, 2014. "Justification and Legitimate Punishment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(1), pages 168-188, March.
    9. Rong, Rong & Houser, Daniel & Dai, Anovia Yifan, 2016. "Money or friends: Social identity and deception in networks," European Economic Review, Elsevier, vol. 90(C), pages 56-66.
    10. Erte Xiao & Howard Kunreuther, 2016. "Punishment and Cooperation in Stochastic Social Dilemmas," Journal of Conflict Resolution, Peace Science Society (International), vol. 60(4), pages 670-693, June.
    11. Daniela Grieco & Marco Faillo & Luca Zarri, 2013. "Top Contributors as Punishers," Working Papers 24/2013, University of Verona, Department of Economics.
    12. Xiao, Erte & Houser, Daniel, 2011. "Punish in public," Journal of Public Economics, Elsevier, vol. 95(7), pages 1006-1017.
    13. Jahnke, Björn & Fochmann, Martin & Wagener, Andreas, 2016. "Does the reliability of institutions affect public good contributions? Evidence from a laboratory experiment," Annual Conference 2016 (Augsburg): Demographic Change 145646, Verein für Socialpolitik / German Economic Association.
    14. David Dickinson & E. Glenn Dutcher & Cortney Rodet, 2015. "Observed punishment spillover effects: a laboratory investigation of behavior in a social dilemma," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 136-153, March.
    15. H. Sun & M. Bigoni, 2015. "A Fine Rule From a Brutish World? An Experiment on Endogenous Punishment Institution and Trust," Working Papers wp1031, Dipartimento Scienze Economiche, Universita' di Bologna.
    16. Tan, Fangfang & Xiao, Erte, 2012. "Peer punishment with third-party approval in a social dilemma game," Economics Letters, Elsevier, vol. 117(3), pages 589-591.
    17. repec:eee:jeborg:v:136:y:2017:i:c:p:15-28 is not listed on IDEAS
    18. repec:eee:pubeco:v:156:y:2017:i:c:p:59-72 is not listed on IDEAS

    More about this item

    Keywords

    Punishment; Norms; Corruption; Sender–receiver game; Experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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