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Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?

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  • Nikos Nikiforakis

    (Royal Holloway, University of London)

Abstract

In the public goods literature, there have been recently a number of experiments which demonstrate how the problem of the under-provision of a public good can be solved through mutual monitoring and sanctioning between the members of a group when antisocial behavior is observed. In many circumstances, however, we can not allow for punishment and exclude the possibility of counter-punishment occurring. We design a public goods experiment based on Fehr and Gaechter (2000) where we allow for both punishment and counter-punishment. We find that in both Partner and Stranger treatments average contributions decline steadily over time, at a rate similar to the treatment were no punishment was allowed, and tend towards full free-riding. The reason for this change seems to be that under the threat of counter-punishment people are less willing to punish. An important result is that participants squander their endowment in punishment and counter-punishment actions leading to a relative payoff loss, in comparison to the treatment without punishments.

Suggested Citation

  • Nikos Nikiforakis, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Experimental 0403001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpex:0403001
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    References listed on IDEAS

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    1. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, vol. 65(4), pages 833-860, July.
    2. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April.
    3. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
    4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    5. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    6. R. Isaac & James Walker & Susan Thomas, 1984. "Divergent evidence on free riding: An experimental examination of possible explanations," Public Choice, Springer, vol. 43(2), pages 113-149, January.
    7. Ernst Fehr & Simon Gaechter, 2003. "Altruistic Punishment in Humans," Microeconomics 0305006, University Library of Munich, Germany.
    8. Colin F. Camerer & Richard H. Thaler, 1995. "Anomalies: Ultimatums, Dictators and Manners," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 209-219, Spring.
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    Cited by:

    1. Stephan Kroll & Todd L. Cherry & Jason F. Shogren, 2007. "Voting, Punishment, And Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 557-570, July.
    2. Simon Gaechter & Benedikt Herrmann, 2006. "The limits of self-governance in the presence of spite: Experimental evidence from urban and rural Russia," Discussion Papers 2006-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    3. Guillen, Pablo & Fatas, Enrique & Brañas-Garza, Pablo, 2010. "Inducing efficient conditional cooperation patterns in public goods games, an experimental investigation," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 872-883, December.
    4. Marco Casari, 2005. "On the Design of Peer Punishment Experiments," Experimental Economics, Springer;Economic Science Association, vol. 8(2), pages 107-115, June.
    5. Jeffrey Carpenter & Peter Matthews, 2009. "What norms trigger punishment?," Experimental Economics, Springer;Economic Science Association, vol. 12(3), pages 272-288, September.
    6. Klaus Abbink & Jordi Brandts & Benedikt Herrmann & Henrik Orzen, 2010. "Intergroup Conflict and Intra-group Punishment in an Experimental Contest Game," American Economic Review, American Economic Association, vol. 100(1), pages 420-447, March.
    7. Marco Casari & Luigi Luini, 2005. "Group Cooperation Under Alternative Peer Punishment Technologies: An Experiment," Labsi Experimental Economics Laboratory University of Siena 002, University of Siena.
    8. Talbot Page & Louis Putterman & Bruno Garcia, 2008. "Getting Punnishment Right: Do Costly Monitoring or Redustributive Punishment Help?," Working Papers 2008-1, Brown University, Department of Economics.
    9. Visser, Martine & Burns, Justine, 2006. "Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods," Working Papers in Economics 219, University of Gothenburg, Department of Economics.
    10. Haigner, Stefan & Kocher, Martin & Sutter, Matthias, 2006. "Choosing the Stick or the Carrot? Endogenous Institutional Choice in Social Dilemma Situations," CEPR Discussion Papers 5497, C.E.P.R. Discussion Papers.
    11. Arhan Ertan & Talbot Page & Louis Putterman, 2005. "Can Endogenously Chosen Institutions Mitigate the Free-Rider Problem and Reduce Perverse Punishment?," Working Papers 2005-13, Brown University, Department of Economics.
    12. Reuben, Ernesto & van Winden, Frans, 2010. "Fairness perceptions and prosocial emotions in the power to take," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 908-922, December.
    13. Robert Gazzale & Tapan Khopkar, 2011. "Remain silent and ye shall suffer: seller exploitation of reticent buyers in an experimental reputation system," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 273-285, May.
    14. Stoop, Jan & van Soest, Daan & Vyrastekova, Jana, 2011. "Carrots without Bite: On the Ineffectiveness of 'Rewards' in sustaining Cooperation in Social Dilemmas," MPRA Paper 30538, University Library of Munich, Germany.

    More about this item

    Keywords

    punishment; counter-punishment; public goods games; free- riding;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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