Abstract

http://ssrn.com/abstract=2247446
 
 

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When Punishment Doesn't Pay: 'Cold Glow' and Decisions to Punish


Aurelie Ouss


University of Chicago Crime Lab; Harvard University

Alexander Peysakhovich


Human Cooperation Lab at Yale University

October 14, 2013


Abstract:     
Economic theories of punishment focus on determining the levels that provide maximal social material payoffs. In calculating these levels several parameters are key: total social costs, total social benefits and the probability that offenders are apprehended. However, levels of punishment often are determined by aggregates of individual decisions. Research in behavioral economics, psychology and neuroscience shows that individuals appear to treat punishment as a private good (“cold glow”). Thus individual choices may not respond “appropriately” to the parameters above. This can have large consequences: realized punishment levels can be predictably above or below those that maximize aggregate material payoffs. Such behavior can lead to inefficiencies in final social outcomes such as levels of cooperation and total costs incurred. We confirm these predictions in a series of experiments. Our findings highlight the importance of the psychology of punishment for understanding social outcomes and for designing social mechanisms, for example in sentencing policy.

Number of Pages in PDF File: 63

Keywords: punishment, cooperation, behavioral economics, law and economics

JEL Classification: D00, D07

working papers series


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Date posted: April 14, 2013 ; Last revised: October 14, 2013

Suggested Citation

Ouss, Aurelie and Peysakhovich, Alexander, When Punishment Doesn't Pay: 'Cold Glow' and Decisions to Punish (October 14, 2013). Available at SSRN: http://ssrn.com/abstract=2247446 or http://dx.doi.org/10.2139/ssrn.2247446

Contact Information

Aurelie Ouss
University of Chicago Crime Lab ( email )
1101 East 58th Street
Chicago, IL 60637
United States
Harvard University ( email )
1875 Cambridge Street
Cambridge, MA 02138
United States
Alexander Peysakhovich (Contact Author)
Human Cooperation Lab at Yale University ( email )
New Haven, CT
United States
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