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Punishment, inequality, and welfare : a public good experiment

  • David Masclet

    (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal)

  • Marie Claire Villeval

    ()

    (GATE - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines, IZA - Institute for the Study of Labor - Institute for the Study of Labor IZA)

This paper reports the results of an experiment that investigates the relationships between inequality and punishment. In particular, we analyze how inter-personal comparisons affect altruistic punishment behavior. In addition, we examine how punishment affects inequality over time. We compare two treatments of a two-stage public good game, one in which costly punishment reduces the immediate payoff inequality between the punisher and the target, and one in which it does not affect the current level of inequality. Our results indicate that subjects punish even when they cannot alter the current distribution of payoffs. We find however that in both treatments, the intensity of punishment increases in the level of inequality. Finally, despite its cost, we show that punishment improves welfare in association with a decrease in the level of inequality over time.

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File URL: https://halshs.archives-ouvertes.fr/halshs-00196567/document
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Paper provided by HAL in its series Post-Print with number halshs-00196567.

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Date of creation: 2008
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Publication status: Published in Social Choice and Welfare, Springer Verlag, 2008, 31 (3), pp.475-502. <10.1007/s00355-007-0291-7>
Handle: RePEc:hal:journl:halshs-00196567
DOI: 10.1007/s00355-007-0291-7
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00196567
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  1. Daniel Houser & Erte Xiao & Kevin McCabe & Vernon Smith, 2005. "When punishment fails: Research on sanctions, intentions and non- cooperation," Experimental 0503001, EconWPA.
  2. Martijn Egas & Arno Riedl, 2005. "The Economics of Altruistic Punishment and the Demise of Cooperation," Tinbergen Institute Discussion Papers 05-065/1, Tinbergen Institute.
  3. David Masclet & Charles Noussair & Steven Tucker & Marie Claire Villeval, 2001. "Monetary and Non-Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00151423, HAL.
  4. Jeffrey Carpenter & Peter Matthews & Okomboli Ong’ong’a, 2004. "Why Punish? Social reciprocity and the enforcement of prosocial norms," Journal of Evolutionary Economics, Springer, vol. 14(4), pages 407-429, October.
  5. Neumark, David & Postlewaite, Andrew, 1998. "Relative income concerns and the rise in married women's employment," Journal of Public Economics, Elsevier, vol. 70(1), pages 157-183, October.
  6. Jeffrey Carpenter & Peter Matthews, 2002. "Social Reciprocity," Middlebury College Working Paper Series 0229, Middlebury College, Department of Economics.
  7. Astrid Hopfensitz & Ernesto Reuben, 2005. "The Importance of Emotions for the Effectiveness of Social Punishment," Tinbergen Institute Discussion Papers 05-075/1, Tinbergen Institute, revised 28 Mar 2006.
  8. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
  9. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  10. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
  11. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  12. Louis Putterman & Christopher M. Anderson, 2003. "Do Non-strategic Sanctions Obey the Law of Demand? The Demand for Punishment in the Voluntary Contribution Mechanism," Working Papers 2003-15, Brown University, Department of Economics.
  13. Samuel Bowles & Herbert Gintis, 2000. "The Evolution of Strong Reciprocity," UMASS Amherst Economics Working Papers 2000-05, University of Massachusetts Amherst, Department of Economics.
  14. Jeffrey Carpenter, 2002. "Punishing Free Riders: how group size affects mutual monitoring and the provision of public goods," Middlebury College Working Paper Series 0206, Middlebury College, Department of Economics.
  15. Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
  16. Pezzini, Silvia & Robert MacCulloch, 2003. "The Role of Freedom, Growth and Religion in the Taste for Revolution," Royal Economic Society Annual Conference 2003 163, Royal Economic Society.
  17. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2005. "Driving Forces Behind Informal Sanctions," IZA Discussion Papers 1635, Institute for the Study of Labor (IZA).
  18. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  19. Oliver Bochet & Talbot Page & Louis Putterman, 2002. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2002-29, Brown University, Department of Economics.
  20. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
  21. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
  22. Ernst Fehr & Bettina Rockenbach, 2003. "Detrimental effects of sanctions on human altruism," Microeconomics 0305007, EconWPA.
  23. Brown, Gordon D. A. & Gardner, Jonathan & Oswald, Andrew J. & Qian, Jing, 2005. "Does Wage Rank Affect Employees' Wellbeing?," IZA Discussion Papers 1505, Institute for the Study of Labor (IZA).
  24. Robert MacCulloch & Silvia Pezzini, 2007. "Money, religion and revolution," Economics of Governance, Springer, vol. 8(1), pages 1-16, January.
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