Threat and Punishment in Public Good Experiments

David Masclet (), Charles Noussair and Marie Claire Villeval

No 5206, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Experimental studies of social dilemmas have shown that while the existence of a sanctioning institution improves cooperation within groups, it also has a detrimental impact on group earnings in the short run. Could the introduction of pre-play threats to punish have enough of a beneficial impact on cooperation, while not incurring the cost associated with actual punishment, so that they increase overall welfare? We report an experiment in which players can issue non-binding threats to punish others based on their contribution levels to a public good. After observing others’ actual contributions, they choose their actual punishment level. We find that threats increase the level of contributions significantly. Efficiency is improved, but only in the long run. However, the possibility of sanctioning differences between threatened and actual punishment leads to lower threats, cooperation and welfare, restoring them to levels equal to or below the levels attained in the absence of threats.

Keywords: threats; experiment; public good; cheap talk; sanctions (search for similar items in EconPapers)
JEL-codes: C92 D63 H41 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2010-09
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - revised version published in: Economic Inquiry, 2013, 51 (2), 1421-1441

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https://docs.iza.org/dp5206.pdf (application/pdf)

Related works:
Journal Article: THREAT AND PUNISHMENT IN PUBLIC GOOD EXPERIMENTS (2013)
Working Paper: Threat and Punishment in Public Good Experiments (2013)
Working Paper: Threat and Punishment in Public Good Experiments (2011)
Working Paper: Threat and Punishment in Public Good Experiments (2010)
Working Paper: Threat and punishment in public good experiments (2010)
Working Paper: Threat and punishment in public good experiments (2010)
Working Paper: Threat and Punishment in Public Good Experiments (2010)
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