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The Signaling Value of Punishing Norm-Breakers and Rewarding Norm-Followers

Fabrizio Adriani and Silvia Sonderegger ()
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Silvia Sonderegger: School of Economics, University of Nottingham, CEDEX, University Park, Nottingham NG7 2RD, UK

Games, 2018, vol. 9, issue 4, 1-32

Abstract: We formally explore the idea that punishment of norm-breakers may be a vehicle for the older generation to teach youngsters about social norms. We show that this signaling role provides sufficient incentives to sustain costly punishing behavior. People punish norm-breakers to pass information about past history to the younger generation. This creates a link between past, present, and future punishment. Information about the past is important for youngsters, because the past shapes the future. Reward-based mechanisms may also work and are welfare superior to punishment-based ones. However, reward-based mechanisms are fragile, since punishment is a more compelling signaling device (in a sense that we make precise).

Keywords: norms; punishment; reaward; signaling (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2018
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