Threat and Punishment in Public Good Experiments

42 Pages Posted: 4 Oct 2010

See all articles by David Masclet

David Masclet

Université de Rennes I; M@rsouin

Charles N. Noussair

Tilburg University

Marie Claire Villeval

GATE, CNRS

Multiple version iconThere are 4 versions of this paper

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, cheap talk, sanctions, public good, experiment

JEL Classification: C92, H41, D63

Suggested Citation

Masclet, David and Noussair, Charles N. and Villeval, Marie Claire, Threat and Punishment in Public Good Experiments. IZA Discussion Paper No. 5206, Available at SSRN: https://ssrn.com/abstract=1686497 or http://dx.doi.org/10.2139/ssrn.1686497

David Masclet (Contact Author)

Université de Rennes I ( email )

11 Rue Jean Macé
35065 Rennes Cedex, Rennes
France

M@rsouin ( email )

France

Charles N. Noussair

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Marie Claire Villeval

GATE, CNRS ( email )

93, chemin des Mouilles
Ecully, 69130
France
+33 472 86 60 79 (Phone)
+33 472 86 60 90 (Fax)

HOME PAGE: http://sites.google.com/view/marie-claire-villeval

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