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Third-Party Punishment: Retribution or Deterrence?

Listed author(s):
  • Fangfang Tan
  • Erte Xiao

We conduct an experiment to examine the role of retribution and deterrence in motivating third party punishment. In particular, we consider how the role of these two motives may differ according to whether a third party is a group or an individual. In a one-shot prisoner’s dilemma game with third party punishment, we find groups punish more when the penalty embeds deterrence than when it can only be retributive. In contrast, individual third parties’ punishment decisions do not vary on whether the punishment has any deterrent effect. In general, third party groups are less likely to impose punishment than individuals even though the punishment is costless for third parties.

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File URL: http://www.tax.mpg.de/RePEc/mpi/wpaper/TAX-MPG-RPS-2014-05.pdf
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Paper provided by Max Planck Institute for Tax Law and Public Finance in its series Working Papers with number tax-mpg-rps-2014-05.

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Length: 44 pages
Date of creation: May 2014
Handle: RePEc:mpi:wpaper:tax-mpg-rps-2014-05
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