Whom to blame? An experiment of collective harming and punishing

Werner Güth () and Hironori Otsubo

No 2011-046, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: In a situation, where it is efficient for one of two parties to pollute but highly inefficient if both parties do so, the harmed third party can freely impose its damage claims on both parties what crucially determines which equilibrium to expect. Whereas "equality before the law" requires equal punishments, efficient equilibria are predicted when holding one party responsible and letting the other escape punishment. After discussing equilibrium selection for the game, we report on an experiment with two treatment variables: one that determines when the harmed party announces its potential damage claims and one varying a game- and justice-unrelated difference between the two culprits. According to our experimental data, "equality before the law" dominates but is weakened by asymmetry in wealth and the possibility to announce sanctions.

Keywords: Law and economics; Equality vs. efficiency; Equilibrium selection; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C72 C92 K00 (search for similar items in EconPapers)
Date: 2011-10-14
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Citations: View citations in EconPapers (3)

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