Third-Party Punishment and Counter-Punishment in One-Shot Interactions

Balafoutas, Loukas; Grechenig, Kristoffel R.; Nikiforakis, Nikos

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Third-Party Punishment and Counter-Punishment in One-Shot Interactions

Economics Letters, Forthcoming

7 Pages Posted: 24 Dec 2013

See all articles by Loukas Balafoutas

Kristoffel R. Grechenig

Max-Planck-Institute for Research on Collective Goods

Nikos Nikiforakis

New York University (NYU) - New York University, Abu Dhabi

Date Written: December 23, 2013

Abstract

This paper presents experimental evidence from a simple three-person game showing that many individuals are willing to avenge third-party punishment in one-shot interactions. The threat of counter-punishment has a large negative effect on the willingness of third parties to punish selfish behavior. In spite of this, the extent of selfish behavior is identical to that in a treatment without counterpunishment opportunities. We discuss explanations for this puzzling finding.

Keywords: third-party punishment, counter-punishment, norm enforcement, one-shot games

JEL Classification: C92, D70, H41

Suggested Citation: Suggested Citation

Balafoutas, Loukas and Grechenig, Kristoffel R. and Nikiforakis, Nikos, Third-Party Punishment and Counter-Punishment in One-Shot Interactions (December 23, 2013). Economics Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2371404