Altruistic Punishment and the Threat of Feuds

Abstract

Altruistic punishment may promote cooperation, but can also lead to costly feuds. We examine how the threat of feuds a¤ects individuals' willingness to engage in altruistic punishment in a public good experiment in which the number of stages is determined by participants' actions. The design allows participants to use a range of punishment strategies. We …nd that participants employ strategies that prevent the breakout of feuds. When feuds can span several periods, the extent of altruistic punishment is greatly reduced. This leads to progressively lower levels of cooperation and earnings relative to a baseline treatment where punishment cannot be avenged.

Keywords: feuds, altruistic punishment, counter-punishment, public good game, revenge

JEL Classification: C92, D70, H41