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Threat and Punishment in Public Good Experiments

  • Masclet, David

    ()

    (University of Rennes)

  • Noussair, Charles N.

    ()

    (Tilburg University)

  • Villeval, Marie Claire

    ()

    (CNRS, GATE)

Experimental studies of social dilemmas have shown that while the existence of a sanctioning institution improves cooperation within groups, it also has a detrimental impact on group earnings in the short run. Could the introduction of pre-play threats to punish have enough of a beneficial impact on cooperation, while not incurring the cost associated with actual punishment, so that they increase overall welfare? We report an experiment in which players can issue non-binding threats to punish others based on their contribution levels to a public good. After observing others’ actual contributions, they choose their actual punishment level. We find that threats increase the level of contributions significantly. Efficiency is improved, but only in the long run. However, the possibility of sanctioning differences between threatened and actual punishment leads to lower threats, cooperation and welfare, restoring them to levels equal to or below the levels attained in the absence of threats.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5206.

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Length: 42 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5206
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  1. Laurent Denant-Boèmont & David Masclet & Charles Noussair, 2007. "Punishment, counterpunishment and sanction enforcement in a social dilemma experiment," Post-Print halshs-00144843, HAL.
  2. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
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