A Fine Rule From a Brutish World? An Experiment on Endogenous Punishment Institution and Trust

H. Sun and Maria Bigoni

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: By means of a laboratory experiment, we study the impact of the endogenous adoption of a collective punishment mechanism within a one-shot binary trust game. The experiment comprises three games. In the first one, the only equilibrium strategy is not to trust, and not to reciprocate. In the second we exogenously introduce a sanctioning rule that imposes on untrustworthy second-movers a penalty proportional to the number of those who reciprocate trust. This generates a second equilibrium where everybody trusts and reciprocates. In the third game, the collective punishment mechanism is adopted through majority-voting. In line with the theory, we find that the exogenous introduction of the punishment mechanism significantly increases trustworthiness, and to a lesser extent also trust. However, in the third game the majority of subjects vote against it: subjects seem to be unable to endogenously adopt an institution which, when exogenously imposed, proves to be efficiency enhancing.

JEL-codes: C72 C92 D72 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-gth, nep-hpe, nep-net, nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://amsacta.unibo.it/4353/1/WP1031.pdf (application/pdf)

Related works:
Journal Article: A fine rule from a brutish world? An experiment on endogenous punishment institution and trust (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp1031

Access Statistics for this paper

More papers in Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna Contact information at EDIRC.
Bibliographic data for series maintained by Dipartimento Scienze Economiche, Universita' di Bologna ().