Can second-order punishment deter perverse punishment?
Recent experiments have shown that voluntary punishment of free riders can increase contributions, mitigating the free-rider problem. But frequently punishers punish high contributors, creating â€œperverseâ€ incentives which can undermine the benefits of voluntary punishment. In our experiment, allowing punishment of punishing behaviors reduces punishment of high contributors, but gives rise to efficiency-reducing second-order â€œperverseâ€ punishment. On balance, efficiency and contributions are slightly but not significantly enhanced. Copyright Economic Science Association 2006
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