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Peer Punishment with Third-Party Approval in a Social Dilemma Game

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Tan,  Fangfang
Public Economics, MPI for Tax Law and Public Finance, Max Planck Society;

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Citation

Tan, F., & Xiao, E. (2011). Peer Punishment with Third-Party Approval in a Social Dilemma Game. Working Paper of the Max Planck Institute for Tax Law and Public Finance, 2011-16.


Cite as: http://hdl.handle.net/11858/00-001M-0000-000F-46C4-F
Abstract
This paper investigates how punishment promotes cooperation when the punishment enforcer is independent of its proposer. In a prisoner’s dilemma experiment, compared with the case when the implicated parties are allowed to punish each other, cooperation is lower when the enforcement of punishment requires approval from an independent third party. Our data show that the independent third party mitigates the severity of punishment and consequently diminishes the effectiveness of punishment on promoting cooperation when antisocial punishment proposals are rare.