Threat and punishment in public good experiments

David Masclet, Charles N. Noussair, Marie Claire Villeval

Research output: Contribution to journalArticlepeer-review

13 Scopus citations

Abstract

Experimental studies of social dilemmas have shown that while the existence of a sanctioning institution improves cooperation within groups, it also has a detrimental impact on group earnings in the short run. Could the introduction of pre-play threats to punish have enough of a beneficial impact on cooperation, while not incurring the cost associated with actual punishment, so that they increase overall welfare? We report an experiment in which players can issue non-binding threats to punish others based on their contribution levels to a public good. After observing others' actual contributions, they choose their actual punishment level. We find that threats increase the level of contributions significantly. Efficiency is improved, but only in the latter periods. However, the possibility of sanctioning differences between threatened and actual punishment leads to lower threats, cooperation, and welfare, restoring them to levels equal to or below the levels attained in the absence of threats. (JEL C92, H41, D63)

Original languageEnglish (US)
Pages (from-to)1421-1441
Number of pages21
JournalEconomic Inquiry
Volume51
Issue number2
DOIs
StatePublished - Apr 2013
Externally publishedYes

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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