Individual Heterogeneity and Costly Punishment: A Volunteer's Dilemma

(with Andreas Diekmann, ETH Zurich)

Dr Wojtek Przepiorka(wojtek.przepiorka@sociology.ox.ac.uk)

15th International Conference on Social Dilemmas, 10‐13/07/2013, ETH Zurich

Costly punishment in the lab

(Fehr and Gächter 2002) 2

(plektix.fieldofscience.com/2011/04/freedom‐and‐public‐goods.html)

Spend $1 to deduct $3

Spend $1 to deduct $3

Costly punishment around the world

(Herrmann et al. 2008) 3

Spend $1 to deduct $3

Costly punishment in the lab

(Nikiforakis 2008) 4

Varying punishment mechanismVCM: no punishmentP: one‐sided punishmentPCP: two‐sided punishment

Partner matching Stranger matching

Costly punishment online

(Egas and Riedl 2008) 5

Varying cost‐to‐impact ratioT00: no punishmentT13: low cost, high impactT11: low cost, low impactT31: high cost, low impactT33: high cost, high impact

Costly punishment in the field lab

(Baldassarri and Grossman 2011) 6

Varying punishment legitimacyBaseline: no punishmentRandom: one randomly chosen monitorElected: one anonymously elected monitor

Costly punishment as strategic interaction

Free riding produces negative externalities. Thus, punishment of free‐riders produces public goods.

Often, only one individual’s action is sufficient to punish the free‐rider.

However, in a group of individuals, a volunteer’s dilemma can arise (second‐order free‐rider problem).

We investigate how penalty size and punishment cost heterogeneity affect cooperation on both levels.

7

Free riding in the lab

8

Punishing free‐riders in the lab

9

The volunteer’s dilemma (VOD)

10

Public good ∑Ui for a group of n ≥ 2 is produced by a single person i choosing C at a cost Ki where Ui > Ki > 0 i.

Symmetric VOD: Ui = Uj and Ki = Kj i ≠ jAsymmetric VOD: Ui ≠ Uj and/or Ki ≠ Kj i ≠ j

Experimental design

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N = 120

Results: Free riding

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Results: Punishment (at least one)

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Results: Punishment (exactly one)

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Results: Punishment (individual level)

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Conclusions

Peer punishment also entails a coordination problem: If everybody expects everybody else to punish the free‐rider, free riding will persist.

Free riding can be decreased by higher penalties or by coordinated punishment.

We find that individual heterogeneity facilitates coordinated punishment without communication and promotes cooperation.

This suggests that centralized sanctioning institutions can emerge from arbitrary individual differences.

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References

Baldassarri, Delia and Guy Grossman. 2011. "Centralized sanctioning and legitimate authority promote cooperation in humans." Proceedings of the National Academy of Sciences USA 108:11023‐11027.

Egas, Martijn and Arno Riedl. 2008. "The economics of altruistic punishment and the maintenance of cooperation." Proceedings of the Royal Society B275:871‐878.

Fehr, Ernst and Simon Gächter. 2002. "Altruistic punishment in humans." Nature 415:137‐140.

Herrmann, Benedikt, Christian Thöni, and Simon Gächter. 2008. "Antisocial Punishment Across Societies." Science 319:1362‐1367.

Nikiforakis, Nikos. 2008. "Punishment and counter‐punishment in public good games: Can we really govern ourselves?" Journal of Public Economics 92:91‐112.

Przepiorka, Wojtek and Andreas Diekmann. 2013. "Individual heterogeneity and costly punishment: a volunteer’s dilemma." Proceedings of the Royal Society B 280:20130247.

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