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The Demand for Punishment

  • Jeffrey Carpenter

    ()

While many experiments demonstrate that the actual behavior is different than predicted behavior, they have not shown that economic reasoning is necessarily incorrect. Instead, these experiments illustrate that the problem with homo economicus is that his preferences have been mis-specified. Modeled with social preferences, agents who forgo material gains can often be called rational. The current experiment illustrates this point with an example. Assuming self-interested agents, punishment is not credible in social dilemmas, yet people are often willing to incur costs to punish free riders. Despite this seeming irrationality, we show that these same people react to changes in the price of punishing and income as if punishment was an ordinary and normal good.

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0243.pdf
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Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0243.

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Length: 32 pages
Date of creation: Sep 2002
Date of revision:
Handle: RePEc:mdl:mdlpap:0243
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  10. Pillutla, Madan M. & Murnighan, J. Keith, 1996. "Unfairness, Anger, and Spite: Emotional Rejections of Ultimatum Offers," Organizational Behavior and Human Decision Processes, Elsevier, vol. 68(3), pages 208-224, December.
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  19. Georg Kirchsteiger & Ernst Fehr & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," ULB Institutional Repository 2013/5927, ULB -- Universite Libre de Bruxelles.
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