Revenge and Retaliation

THE LAW AND ECONOMICS OF IRRATIONAL BEHAVIOR, Francesco Parisi, Vernon Smith, eds., Stanford University Press, 2005

George Mason Law & Economics Research Paper No. 02-31

33 Pages Posted: 12 Dec 2002  

Vincy Fon

George Washington University - Department of Economics

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Abstract

This paper considers the role of retaliation norms as a way to induce more socially desirable behavior among self-interested parties. The paper first considers the unregulated case in which individuals indulge in mutual aggression, in the absence of other legal or social constraints. Next the relationship between aggressors and their victims is investigated, concentrating on the effect of victim's propensity to retaliate when suffering harm from others. Two retaliatory regimes are examined: proportional retribution and fixed retaliation. Special attention is paid to the impact of these regimes on the parties' interaction. The results suggest that human instincts for revenge may indeed be as important as honesty for the evolution of cooperation. More generally, retaliation norms are an important ingredient for the evolution of desirable social behavior in the absence of other social constraints or legal intervention.

Keywords: Negative Reciprocity, Retaliation, Revenge, Vindictiveness

JEL Classification: D70, C7, Z13

Suggested Citation

Fon, Vincy and Parisi, Francesco, Revenge and Retaliation. THE LAW AND ECONOMICS OF IRRATIONAL BEHAVIOR, Francesco Parisi, Vernon Smith, eds., Stanford University Press, 2005; George Mason Law & Economics Research Paper No. 02-31. Available at SSRN: https://ssrn.com/abstract=359200 or http://dx.doi.org/10.2139/ssrn.359200

Vincy Fon

George Washington University - Department of Economics ( email )

2115 G Street, N.W.
Monroe Hall, #366
Washington, DC 20052
United States
202-994-7580 (Phone)
202-994-6147 (Fax)

Francesco Parisi (Contact Author)

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

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