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The effects of punishment in dynamic public-good games

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  • Bettina Rockenbach
  • Irenaeus Wolff

Abstract

In the evolution of human cooperation, the enforcement of social norms was of vital importance. The punishment of norm violators has two aspects: to immediately harm the violator and to increase the violator’s future cooperativeness. Abundant experimental evidence has demonstrated the success of peer-to-peer punishment for the establishment of stable cooperation. Yet, these studies largely ignore the dynamic aspect: punishment not only destroys today’s resources or abilities, but also reduces the potential for future cooperativeness. If, for example, a hunter who stayed away from today’s hunt is punished physically, this is harmful not only today, but may also limit the physical strength available for tomorrow’s hunt. Thus, although the hunter may be more willing to cooperate in the future, his future potential for cooperation is reduced through the punishment. Here, we experimentally study the role of punishment for cooperation in dynamic public goods games, where past payoffs determine present contribution capabilities. We show that the beneficial role of punishment possibilities for cooperation success is highly fragile. Successful cooperation seems to hinge on the presence of a common understanding on how punishment should be used. If high-contributors punish too readily, the group likely gets on a wasteful path of punishment and retaliation. On the other hand, if punishment is administered more patiently, even initially uncooperative groups thrive. Hence, in dynamic contexts when today’s punishment also determines tomorrow’s cooperation abilities, it seems of crucial importance that groups agree on the right “dose†of sanctions for punishment to successfully support sustainable cooperation, e.g. by establishing a social norm of when and how to use punishment against free-riders .

Suggested Citation

  • Bettina Rockenbach & Irenaeus Wolff, 2017. "The effects of punishment in dynamic public-good games," TWI Research Paper Series 106, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    • Handle: RePEc:twi:respas:0106
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    2. Gaechter, S. & Mengel, F. & Tsakas, E. & Vostroknutov, A., 2013. "Growth and inequality in public good games," Research Memorandum 070, Maastricht University, Graduate School of Business and Economics (GSBE).
    3. Pevnitskaya, Svetlana & Ryvkin, Dmitry, 2022. "The effect of access to clean technology on pollution reduction: An experiment," Games and Economic Behavior, Elsevier, vol. 136(C), pages 117-141.
    4. 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.
    5. 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.
    6. Pedro Naso; Tania Theoduloz; Nicholas Tyack; Dambala Gelo; Mare Sarr; Timothy Swanson, 2021. "Using Information to Improve Global Cooperation: A Climate Change Experiment," CIES Research Paper series 72-2021, Centre for International Environmental Studies, The Graduate Institute.
    7. Svetlana Pevnitskaya & Dmitry Ryvkin, 2022. "Strategy Adjustments in Games with a Dynamic Public Bad: Experimental Evidence," Review of Behavioral Economics, now publishers, vol. 9(2), pages 173-184, June.
    8. Glöckner, Andreas & Kube, Sebastian & Nicklisch, Andreas, 2018. "The joint benefits of observed and unobserved social sanctions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 105-116.
    9. Eichenseer, Michael & Moser, Johannes, 2018. "Leadership in a Dynamic Public Goods Game: An Experimental Study," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181599, Verein für Socialpolitik / German Economic Association.
    10. Gächter, Simon & Mengel, Friederike & Tsakas, Elias & Vostroknutov, Alexander, 2017. "Growth and inequality in public good provision," Journal of Public Economics, Elsevier, vol. 150(C), pages 1-13.

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    More about this item

    Keywords

    Cooperation; Dynamic game; Punishment; Retaliation; Endowment endogeneity; Experiment;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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