IDEAS home Printed from https://ideas.repec.org/p/mpg/wpaper/2013_09.html
   My bibliography  Save this paper

Deterrence by Imperfect Sanctions – A Public Good Experiment

Author

Listed:
  • Christoph Engel

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

Sanctions are often so weak that a money maximizing individual would not be deterred. In this paper I show that they may nonetheless serve a forward looking purpose if sufficiently many individuals are averse against advantageous inequity. Using the Fehr/Schmidt model (QJE 1999) I define three alternative channels: (a) identical preferences are common knowledge, but inequity is not pronounced enough to sustain cooperation; (b) heterogeneous preferences are common knowledge; (c) there is preference uncertainty. In a linear public good with punishment meted out by a disinterested participant, I test two implications of the model: (a) participants increase contributions in reaction to imperfect punishment; (b) imperfect punishment helps sustain cooperation if participants experience free-riding

Suggested Citation

  • Christoph Engel, 2013. "Deterrence by Imperfect Sanctions – A Public Good Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_09, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2013_09
    as

    Download full text from publisher

    File URL: http://www.coll.mpg.de/pdf_dat/2013_09online.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    2. Maria Montero & Martin Sefton & Ping Zhang, 2008. "Enlargement and the balance of power: an experimental study," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 69-87, January.
    3. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April.
    4. Jean‐Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non‐deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, March.
    5. Jeffrey Carpenter & Peter Matthews & Okomboli Ong’ong’a, 2004. "Why Punish? Social reciprocity and the enforcement of prosocial norms," Journal of Evolutionary Economics, Springer, vol. 14(4), pages 407-429, October.
    6. Guererk, Oezguer & Rockenbach, Bettina & Wolff, Irenaeus, 2010. "The effects of punishment in dynamic public-good games," MPRA Paper 22097, University Library of Munich, Germany.
    7. Christian Thöni, 2014. "Inequality aversion and antisocial punishment," Theory and Decision, Springer, vol. 76(4), pages 529-545, April.
    8. Douglas D. Heckathorn, 1989. "Collective Action and the Second-Order Free-Rider Problem," Rationality and Society, , vol. 1(1), pages 78-100, July.
    9. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    10. Michael Kosfeld & Akira Okada & Arno Riedl, 2009. "Institution Formation in Public Goods Games," American Economic Review, American Economic Association, vol. 99(4), pages 1335-1355, September.
    11. 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.
    12. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    13. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    14. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    15. Marco Casari, 2005. "On the Design of Peer Punishment Experiments," Experimental Economics, Springer;Economic Science Association, vol. 8(2), pages 107-115, June.
    16. 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.
    17. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    18. Attila Ambrus & Ben Greiner, 2012. "Imperfect Public Monitoring with Costly Punishment: An Experimental Study," American Economic Review, American Economic Association, vol. 102(7), pages 3317-3332, December.
    19. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    20. Nikos Nikiforakis & Hans-Theo Normann, 2008. "A comparative statics analysis of punishment in public-good experiments," Experimental Economics, Springer;Economic Science Association, vol. 11(4), pages 358-369, December.
    21. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, September.
    22. Dufwenberg, Martin & Gächter, Simon & Hennig-Schmidt, Heike, 2011. "The framing of games and the psychology of play," Games and Economic Behavior, Elsevier, vol. 73(2), pages 459-478.
    23. Paolo Crosetto & Werner Güth & Luigi Mittone & Matteo Ploner, 2012. "Motives of Sanctioning: Equity and Emotions in a Public Good Experiment with Punishment," Jena Economics Research Papers 2012-046, Friedrich-Schiller-University Jena.
    24. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    25. Jennifer Zelmer, 2003. "Linear Public Goods Experiments: A Meta-Analysis," Experimental Economics, Springer;Economic Science Association, vol. 6(3), pages 299-310, November.
    26. Charness, Gary, 2000. "Self-Serving Cheap Talk: A Test Of Aumann's Conjecture," Games and Economic Behavior, Elsevier, vol. 33(2), pages 177-194, November.
    27. David Masclet & Marie-Claire Villeval, 2008. "Punishment, inequality, and welfare: a public good experiment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 31(3), pages 475-502, October.
    28. Sergio Sousa, 2010. "Cooperation and Punishment under Uncertain Enforcement," Discussion Papers 2010-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    29. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, vol. 72(2), pages 321-338, June.
    30. Johnson, Tim & Dawes, Christopher T. & Fowler, James H. & McElreath, Richard & Smirnov, Oleg, 2009. "The role of egalitarian motives in altruistic punishment," Economics Letters, Elsevier, vol. 102(3), pages 192-194, March.
    31. 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.
    32. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    33. Christoph Engel, 2010. "Turning the Lab into Jeremy Bentham’s Panopticon. A Lab Experiment on the Transparency of Punishment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2010_06, Max Planck Institute for Research on Collective Goods, revised Jun 2018.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Simon Gaechter, 2014. "Human Pro-Social Motivation and the Maintenance of Social Order," CESifo Working Paper Series 4729, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Engel, Christoph, 2014. "Social preferences can make imperfect sanctions work: Evidence from a public good experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 343-353.
    2. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
    3. Marie Claire Villeval, 2012. "Contribution au bien public et préférences sociales : Apports récents de l'économie comportementale," Post-Print halshs-00681348, HAL.
    4. Karakostas, Alexandros & Kocher, Martin G. & Matzat, Dominik & Rau, Holger A. & Riewe, Gerhard, 2023. "The team allocator game: Allocation power in public goods games," Games and Economic Behavior, Elsevier, vol. 140(C), pages 73-87.
    5. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
    6. Deffains, Bruno & Espinosa, Romain & Fluet, Claude, 2019. "Laws and norms: Experimental evidence with liability rules," International Review of Law and Economics, Elsevier, vol. 60(C).
    7. Goeschl, Timo & Jarke, Johannes, 2013. "Second vs. Third Party Punishment under Costly Monitoringː A New Experimental Method and Evidence," WiSo-HH Working Paper Series 6, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    8. Simon Gaechter, 2014. "Human Pro-Social Motivation and the Maintenance of Social Order," Discussion Papers 2014-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    9. Christoph Engel & Bettina Rockenbach, 2009. "We Are Not Alone: The Impact of Externalities on Public Good Provision," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2009_29, Max Planck Institute for Research on Collective Goods, revised May 2011.
    10. Leibbrandt, Andreas & López-Pérez, Raúl & Spiegelman, Eli, 2023. "Reciprocal, but inequality averse as well? Mixed motives for punishment and reward," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 91-116.
    11. Christoph Engel & Lilia Zhurakhovska, 2013. "Do Explicit Reasons Make Legal Intervention More Effective? An Experimental Study," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_16, Max Planck Institute for Research on Collective Goods, revised Mar 2018.
    12. Fluet, Claude & Galbiati, Rpbertp, 2016. "Lois et normes : les enseignements de l'économie comportementale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 191-215, Mars-Juin.
    13. Christian Thoeni & Simon Gaechter, 2011. "Peer Effects and Social Preferences in Voluntary Cooperation," Discussion Papers 2011-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    14. Kerschbamer, Rudolf, 2015. "The geometry of distributional preferences and a non-parametric identification approach: The Equality Equivalence Test," European Economic Review, Elsevier, vol. 76(C), pages 85-103.
    15. Kim, Jeongbin & Putterman, Louis & Zhang, Xinyi, 2022. "Trust, Beliefs and Cooperation: Excavating a Foundation of Strong Economies," European Economic Review, Elsevier, vol. 147(C).
    16. Kölle, Felix, 2015. "Heterogeneity and cooperation: The role of capability and valuation on public goods provision," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 120-134.
    17. Cornée, Simon & Masclet, David, 2022. "Long-term relationships, group lending, and peer monitoring in microfinance: Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    18. Nicklisch, Andreas & Grechenig, Kristoffel & Thöni, Christian, 2016. "Information-sensitive Leviathans," Journal of Public Economics, Elsevier, vol. 144(C), pages 1-13.
    19. Kurt A. Ackermann & Ryan O. Murphy, 2019. "Explaining Cooperative Behavior in Public Goods Games: How Preferences and Beliefs Affect Contribution Levels," Games, MDPI, vol. 10(1), pages 1-34, March.
    20. Peeters, Ronald & Vorsatz, Marc, 2021. "Simple guilt and cooperation," Journal of Economic Psychology, Elsevier, vol. 82(C).

    More about this item

    Keywords

    Deterrence; Public Good Experiment; Inequity Aversion; imperfect sanction; Fehr/Schmidt preferences; centralized punishement;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mpg:wpaper:2013_09. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marc Martin (email available below). General contact details of provider: https://edirc.repec.org/data/mppggde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.