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Social norms, third-party observation and third-party reward

  • Matthias Sutter

    ()

  • Peter Lindner

    ()

  • Daniela Platsch

    ()

This paper examines the influence of third-party observation and third-party reward on behavior in an experimental prisoner?s dilemma (PD) game. Whereas the existing literature on third-party intervention as a means to sustain social norms has dealt almost exclusively with third-party punishment, we show that both third-party observation and third-party reward have positive effects on cooperation rates, compared to a treatment where no third party is involved. Third-party reward is more effective in increasing cooperation than third-party observation. However, rewards are given too late to prevent a steady downward trend of cooperation rates.

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File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2009-08.pdf
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Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2009-08.

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Length: 25
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:inn:wpaper:2009-08
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  1. James M. Walker & Matthew A. Halloran, 2004. "Rewards and Sanctions and the Provision of Public Goods in One-Shot Settings," Experimental Economics, Springer, vol. 7(3), pages 235-247, October.
  2. 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.
  3. Carpenter, Jeffrey P. & Matthews, Peter Hans, 2005. "Norm Enforcement: Anger, Indignation or Reciprocity?," IZA Discussion Papers 1583, Institute for the Study of Labor (IZA).
  4. Charness, Gary & Cobo-Reyes, Ramón & Jiménez, Natalia, 2008. "An investment game with third-party intervention," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 18-28, October.
  5. Herbert Gintis, 2000. "Strong Reciprocity and Human Sociality," UMASS Amherst Economics Working Papers 2000-02, University of Massachusetts Amherst, Department of Economics.
  6. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  7. Jeffrey Carpenter & Peter Matthews, 2002. "Social Reciprocity," Middlebury College Working Paper Series 0229, Middlebury College, Department of Economics.
  8. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
  9. Ernst Fehr & Urs Fischbacher, 2004. "Third-party punishment and social norms," Experimental 0409002, EconWPA.
  10. Rupert Sausgruber, 2009. "A note on peer effects between teams," Experimental Economics, Springer, vol. 12(2), pages 193-201, June.
  11. Turillo, Carmelo Joseph & Folger, Robert & Lavelle, James J. & Umphress, Elizabeth E. & Gee, Julie O., 2002. "Is virtue its own reward? Self-sacrificial decisions for the sake of fairness," Organizational Behavior and Human Decision Processes, Elsevier, vol. 89(1), pages 839-865, September.
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