Emotions, Sanctions and Cooperation

Abstract:     
We use skin conductance responses and self-reports of hedonic valence to study the emotional basis of cooperation and punishment in a social dilemma. Emotional reaction to free-riding incites individuals to apply sanctions when they are available. The application of sanctions activates a "virtuous emotional circle" that accompanies cooperation. Emotionally aroused cooperators relieve negative emotions when they punish free riders. In response, the free-riders experience negative emotions when punished, and increase their subsequent level of cooperation. The outcome is an increased level of contribution that becomes the new standard or norm. For a given contribution level, individuals attain higher levels of satisfaction when sanctioning institutions are in place.

Number of Pages in PDF File: 37

Keywords: Emotions, Sanctions, Cooperation, Experiment, Skin Conductance Responses

JEL Classification: C92, D62, D63, D64, D74

working papers series