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Legitimate Punishment, Feedback, and the Enforcement of Cooperation

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  • Marco Faillo

    () (Department of Economics, University of Trento)

  • Daniela Grieco

    () (Department of Economics (University of Verona))

  • Luca Zarri

    () (Department of Economics (University of Verona))

Abstract

In real life, punishment is often implemented only insofar as punishers are entitled to punish and punishees deserve to be punished. We provide an experimental test for this principle of legitimacy in the framework of a public goods game, by comparing it with a classic (unrestricted) punishment institution. A significant advantage of our institution is that it rules out antisocial punishment, a phenomenon which recent studies document to play a key role in undermining the scope for self-governance. Our findings show that, despite the lack of additional monetary incentives to cooperate, the introduction of legitimate punishment leads to substantial efficiency gains, in terms of both cooperation and earnings. Therefore, in businesses and other organizations, this device could successfully deal with the principal-agent problem, with the principal delegating a task to a team of agents. Further, we interestingly find that removing the information over high contributors’ choices only leads to a dramatic decline in cooperation rates and earnings. This result implies that providing feedback over virtuous behavior is necessary to make an institution based on legitimate punishment effective.

Suggested Citation

  • Marco Faillo & Daniela Grieco & Luca Zarri, 2010. "Legitimate Punishment, Feedback, and the Enforcement of Cooperation," Working Papers 16/2010, University of Verona, Department of Economics.
  • Handle: RePEc:ver:wpaper:16/2010
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    Cited by:

    1. Faillo, Marco & Grieco, Daniela & Zarri, Luca, 2012. "Cultural Diversity, Cooperation,and Anti-social Punishment," AICCON Working Papers 102-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    2. Mike Farjam & Marco Faillo & Ida Sprinkhuizen-Kuyper & Pim Haselager, 2015. "Punishment Mechanisms and Their Effect on Cooperation: A Simulation Study," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 18(1), pages 1-5.
    3. repec:eee:joepsy:v:61:y:2017:i:c:p:55-73 is not listed on IDEAS
    4. Daniela Grieco & Michela Braga & Francesco Bripi, 2016. "Cooperation and leadership in a segregated community: Evidence from a lab-in-the-field experiment in a South African township," WIDER Working Paper Series 076, World Institute for Development Economic Research (UNU-WIDER).
    5. repec:eee:ecolet:v:157:y:2017:i:c:p:41-44 is not listed on IDEAS
    6. Daniel Villatoro & Giulia Andrighetto & Rosaria Conte & Jordi Sabater-Mir, 2015. "Self-Policing Through Norm Internalization: A Cognitive Solution to the Tragedy of the Digital Commons in Social Networks," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 18(2), pages 1-2.
    7. Laura K. Gee & Xinxin Lyu & Heather Urry, 2017. "Anger Management: Aggression and Punishment in the Provision of Public Goods," Games, MDPI, Open Access Journal, vol. 8(1), pages 1-28, January.
    8. Erte Xiao & Howard Kunreuther, 2016. "Punishment and Cooperation in Stochastic Social Dilemmas," Journal of Conflict Resolution, Peace Science Society (International), vol. 60(4), pages 670-693, June.
    9. Daniela Grieco & Marco Faillo & Luca Zarri, 2013. "Top Contributors as Punishers," Working Papers 24/2013, University of Verona, Department of Economics.

    More about this item

    Keywords

    Experimental Economics; Public Good Games; Costly Punishment; Cooperation; Legitimacy; Immunity;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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