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Peer Punishment with Third-Party Approval in a Social Dilemma Game

3 Pages Posted: 17 Oct 2011 Last revised: 5 Sep 2013

Fangfang Tan

Tilburg University - Department of Economics

Erte Xiao

Department of Economics, Monash University

Date Written: October 1, 2011

Abstract

This paper investigates how punishment promotes cooperation when the punishment enforcer is independent of its proposer. In a prisoner’s dilemma experiment, compared with the case when the implicated parties are allowed to punish each other, cooperation is lower when the enforcement of punishment requires approval from an independent third party. Our data show that the independent third party mitigates the severity of punishment and consequently diminishes the effectiveness of punishment on promoting cooperation when antisocial punishment proposals are rare.

Keywords: Social dilemmas, third party, punishment, cooperation, experiment

JEL Classification: C72, C92, D63

Suggested Citation

Tan, Fangfang and Xiao, Erte, Peer Punishment with Third-Party Approval in a Social Dilemma Game (October 1, 2011). Economics Letters, Vol. 117, 2012; Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2011-16. Available at SSRN: https://ssrn.com/abstract=1945211 or http://dx.doi.org/10.2139/ssrn.1945211

Fangfang Tan (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands
+49 89 24246 5252 (Phone)
+49 89 24246 5299 (Fax)

HOME PAGE: http://www.tax.mpg.de/en/pub/public_economics/public_economics_people/fangfang_tan.cfm

Erte Xiao

Department of Economics, Monash University ( email )

Wellington Road
Victoria, Roodepoort 3145
Australia

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