Conditional Cooperation and the Effect of Punishment

38 Pages Posted: 23 Jun 2018

See all articles by Oliver Kirchkamp

Oliver Kirchkamp

University of Jena - Economics Department; CESifo (Center for Economic Studies and Ifo Institute)

Wladislaw Mill

University of Mannheim - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 8, 2018

Abstract

We study how punishment influences conditional cooperation. We ask two questions: 1) how does conditional cooperation change if a subject can be punished and 2) how does conditional cooperation change if a subject has the power to punish others. In particular, we disentangle the decision to be a conditional cooperator at all from the strength of conditional cooperation. We find that the possibility of being punished increases the strength of conditional cooperation. At the same time the possibility of being punished increases the number of free riders. In our study the net effect on cooperation still is positive. The possibility of punishing others has two effects: Substitution and responsibility. Players substitute conditional cooperation with punishment which leads to a decrease in conditional cooperation. The power to punish means more responsibility which leads to an increase in conditional cooperation. In our design the overall effect of responsibility is stronger than the effect of substitution. We conclude that the threat of being punished and the power to punish changes conditional cooperation behavior in several, unexpected, ways.

Keywords: Punishment, Conditional Cooperation, Experiment, Substitution, Responsibility

JEL Classification: C91, C72, H41

Suggested Citation

Kirchkamp, Oliver and Mill, Wladislaw, Conditional Cooperation and the Effect of Punishment (June 8, 2018). Available at SSRN: https://ssrn.com/abstract=3192922 or http://dx.doi.org/10.2139/ssrn.3192922

Oliver Kirchkamp

University of Jena - Economics Department ( email )

Carl-Zeiss-Str. 3
Jena, 07737
Germany

HOME PAGE: http://www.kirchkamp.de/

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.kirchkamp.de/

Wladislaw Mill (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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