When Punishment Fails: Research on Sanctions, Intentions and Non-Cooperation
48 Pages Posted: 30 Aug 2005
Date Written: June 2005
People can become less cooperative when threatened with sanctions, and previous research has pointed to both intentions and incentives as sources of this effect. This paper reports data from a novel experiment aimed at determining the relative importance of intentions and incentives in producing non-cooperative behavior in a personal exchange environment. Subjects play a one-shot investment game in pairs. Investors send an amount to trustees and request a return on this investment and, in some treatments, are given the option to threaten sanctions to enforce this return request. The decisions of trustees who face credible threats intentionally imposed (or not) by their investors are compared to the decisions of trustees who face credible threats randomly imposed (or not) by nature. When not threatened, trustees typically decide to return a positive amount that is less than the investor requested. When threatened with sanctions this decision becomes least common. In particular, under severe sanction threats most trustees return the desired amount, while under weak threats the most common decision is to return nothing. These results do not depend on whether trustees are threatened intentionally by their investors or randomly by nature. We suggest that credible sanction threats generate a "cognitive shift" that crowd-out norm-based social behaviors and increase the likelihood of income-maximizing decisions.
Keywords: experiment, intentions, sanctions, trust, cooperation
JEL Classification: C91, C92, C71
Suggested Citation: Suggested Citation