Second-party and third-party punishment in a public goods experiment

ABSTRACT

We experimentally investigate whether third-party punishment is more effective than second-party punishment to increase public goods contribution. In our experiment, third parties first played the standard public goods game and then made punishment decisions as independent bystanders. We find that third parties punished more frequently, severely and less antisocially, resulting in a higher contribution level than that driven by second-party punishment. The third party’s exaggerated emotion towards free riders is proposed to explain their superior punishment effectiveness.

KEYWORDS:

• Third-party punishment
• second-party punishment
• public goods experiment
• free rider

JEL CLASSIFICATION:

• H41
• C92
• D70

Acknowledgements

We thank Simon Gächter, Joshua Tasoff, Pinghan Liang, and two anonymous referees for their comments and Prof. Mingjian Zhou for his assistance. This study benefited from participation in 2013 North-American Economic Science Association Conference.

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplemental Material

Supplemental data for this article can be accessed here.

Notes

¹ We disallowed the last group to punish the first group to avoid the punishment circle that may add reciprocity effect.

² For example, suppose N is the punisher and M is the punished. M’s contribution is 5 tokens while N’s is 15 tokens; then the deviation of M to N is −10.

³ An anonymous referee mentioned blind revenge as an explanation. We tested it and found it was significant only in SPP decision model, but it did not significantly influence any punishment intensity.

Additional information

Funding

This study was financially supported by National Natural Science Foundation of China [71203046].