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The Economics of Altruistic Punishment and the Demise of Cooperation

Author

Listed:
  • Martijn Egas

    (Institute for Biodiversity and Ecosystem Dynamics, University of Amsterdam)

  • Arno Riedl

    (Faculty of Economics and Econometrics, University of Amsterdam)

Abstract
Explaining the evolution and maintenance of cooperation among unrelated individuals is one of the fundamental problems in biology and the social sciences. Recent experimental evidence suggests that altruistic punishment is an important mechanism to maintain cooperation among humans. In this paper we explore the boundary conditions for altruistic punishment to maintain cooperation by systematically varying the cost and impact of punishment, using a subject pool which extends beyond the standard student population. We find that the economics of altruistic punishment lead to the demise of cooperation when punishment is relatively expensive and/or has low impact. Our results indicate that the 'decision to punish' comes from an amalgam of emotional response and cognitive cost-benefit analysis. Additionally, earnings are lowest when punishment promotes cooperation, suggesting that the scope for altruistic punishment as a means to maintain cooperation is limited.

Suggested Citation

  • Martijn Egas & Arno Riedl, 2005. "The Economics of Altruistic Punishment and the Demise of Cooperation," Tinbergen Institute Discussion Papers 05-065/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20050065
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    References listed on IDEAS

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    Cited by:

    1. Gürerk, Özgür, 2013. "Social learning increases the acceptance and the efficiency of punishment institutions in social dilemmas," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 229-239.
    2. Ernesto Reuben & Arno Riedl, 2009. "Public Goods Provision and Sanctioning in Privileged Groups," Journal of Conflict Resolution, Peace Science Society (International), vol. 53(1), pages 72-93, February.
    3. Andreas Nicklisch & Irenaeus Wolff, 2011. "Cooperation Norms in Multiple‐Stage Punishment," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 791-827, October.
    4. Casari, Marco & Luini, Luigi, 2009. "Cooperation under alternative punishment institutions: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 273-282, August.
    5. Astrid Hopfensitz & Ernesto Reuben, 2009. "The Importance of Emotions for the Effectiveness of Social Punishment," Economic Journal, Royal Economic Society, vol. 119(540), pages 1534-1559, October.
    6. Nathalie Colombier & David Masclet & Daniel Mirza & Claude Montmarquette, 2011. "Global Security Policies against Terrorism and the Free Riding Problem: An Experimental Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 755-790, October.
    7. Ye, Maoliang & Nikolov, Plamen & Casaburi, Lorenzo & Asher, Sam, 2008. "Do threshold patterns matter in public good provision?," MPRA Paper 12029, University Library of Munich, Germany.
    8. Herrmann Benedikt & Simon Gachter, 2006. "The limits of self-governance in the presence of spite: Experimental evidence from urban and rural russia," Artefactual Field Experiments 00048, The Field Experiments Website.
    9. Lévy-Garboua, Louis & Masclet, David & Montmarquette, Claude, 2009. "A behavioral Laffer curve: Emergence of a social norm of fairness in a real effort experiment," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 147-161, April.
    10. Visser, Martine & Burns, Justine, 2013. "Inequality, Social Sanctions and Cooperation within South African Fishing," SALDRU Working Papers 117, Southern Africa Labour and Development Research Unit, University of Cape Town.
    11. Asher, Sam & Casaburi, Lorenzo & Nikolov, Plamen & Ye, Maoliang, 2009. "One Step at a Time: Do Threshold Patterns Matter in Public Good Provision?," Economics Discussion Papers 2009-5, Kiel Institute for the World Economy (IfW Kiel).
    12. Friedel Bolle & Claudia Vogel, 2011. "Power comes with responsibility—or does it?," Public Choice, Springer, vol. 148(3), pages 459-470, September.
    13. David Masclet & Marie-Claire Villeval, 2008. "Punishment, inequality, and welfare: a public good experiment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 31(3), pages 475-502, October.
    14. Louis Lévy-Garboua & David Masclet & Claude Montmarquette, 2008. "A Behavioral Laffer Curve: Emergence of a Social Norm of Fairness in a Real Effort Experiment," Working Papers hal-00340459, HAL.
    15. Thomas Markussen & Louis Putterman & Jean-Robert Tyran, 2011. "Self-Organization for Collective Action: An Experimental Study of Voting on Formal, Informal, and No Sanction Regimes," Working Papers 2011-4, Brown University, Department of Economics.
    16. Lowen, Aaron & Schmitt, Pamela, 2013. "Cooperation limitations under a one-time threat of expulsion and punishment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 68-74.
    17. Cadigan, John & Wayland, Patrick T. & Schmitt, Pamela & Swope, Kurtis, 2011. "An experimental dynamic public goods game with carryover," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 523-531.
    18. Michael Kosfeld & Akira Okada & Arno Riedl, 2009. "Institution Formation in Public Goods Games," American Economic Review, American Economic Association, vol. 99(4), pages 1335-1355, September.
    19. Louis Putterman & Jean-Robert Tyran & Kenju Kamei, 2010. "Public Goods and Voting on Formal Sanction Schemes: An Experiment," Working Papers 2010-1, Brown University, Department of Economics.
    20. Ertan, Arhan & Page, Talbot & Putterman, Louis, 2009. "Who to punish? Individual decisions and majority rule in mitigating the free rider problem," European Economic Review, Elsevier, vol. 53(5), pages 495-511, July.
    21. Wolff, Irenaeus, 2009. "Counterpunishment revisited: an evolutionary approach," MPRA Paper 16923, University Library of Munich, Germany.
    22. Jana Vyrastekova & Daan van Soest, 2008. "On the (in)effectiveness of rewards in sustaining cooperation," Experimental Economics, Springer;Economic Science Association, vol. 11(1), pages 53-65, March.
    23. Vyrastekova, J. & Funaki, Y. & Takeuchi, A., 2008. "Strategic vs Non-Strategic Motivations of Sanctioning," Discussion Paper 2008-48, Tilburg University, Center for Economic Research.
    24. Visser, Martine & Burns, Justine, 2006. "Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods," Working Papers in Economics 219, University of Gothenburg, Department of Economics.
    25. Marco Faillo & Federico Fornasari & Luigi Mittone, 2016. "Tell Me How to Rule: Leadership, Delegation, and Voice in Cooperation," CEEL Working Papers 1604, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.

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    More about this item

    Keywords

    altrusitic puishment; collective action; public goods; internet experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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