The Effects of Endowment Size and Strategy Method on Third-Party Punishment

45 Pages Posted: 23 Apr 2014 Last revised: 4 Sep 2015

See all articles by Jillian Jordan

Jillian Jordan

Kellogg School of Management, Northwestern University

Katherine McAuliffe

Yale University - Department of Psychology

David G. Rand

Massachusetts Institute of Technology (MIT)

Date Written: March 27, 2015

Abstract

Numerous experiments have shown that people often engage in third-party punishment (3PP) of selfish behavior. This evidence has been used to argue that people respond to selfishness with anger, and get utility from punishing those who mistreat others. Elements of the standard 3PP experimental design, however, allow alternative explanations: it has been argued that 3PP could be motivated by envy (as selfish dictators earn high payoffs), or could be influenced by the use of the strategy method (which is known to influence second-party punishment). Here we test these alternatives by varying the third party’s endowment and the use of the strategy method, and measuring punishment. We find that while third parties do report more envy when they have lower endowments, neither manipulation significantly affects punishment. We also show that punishment is associated with ratings of anger but not of envy. Thus, our results suggest that 3PP is not an artifact of self-focused envy or use of the strategy method. Instead, our findings are consistent with the hypothesis that 3PP is motivated by anger.

Keywords: cooperation, norm-enforcement, strategy method, emotions, fairness, economic games

JEL Classification: C71, C90, C91, D63, D64, D70, D71

Suggested Citation

Jordan, Jillian and McAuliffe, Katherine and Rand, David G., The Effects of Endowment Size and Strategy Method on Third-Party Punishment (March 27, 2015). Experimental Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2427274 or http://dx.doi.org/10.2139/ssrn.2427274

Jillian Jordan (Contact Author)

Kellogg School of Management, Northwestern University ( email )

2211 Campus Drive
Evanston, IL 60208
United States

Katherine McAuliffe

Yale University - Department of Psychology ( email )

P.O. Box 208205
New Haven, CT 06520-8205
United States

David G. Rand

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

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