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Third-Party Punishment: Retribution or Deterrence?

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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. (2014). Third-Party Punishment: Retribution or Deterrence? Working Paper of the Max Planck Institute for Tax Law and Public Finance, No. 2014-05.


Cite as: https://hdl.handle.net/11858/00-001M-0000-0025-7749-F
Abstract
We conduct an experiment to examine the role of retribution and deterrence in motivating third party punishment. In particular, we consider how the role of these two motives may differ according to whether a third party is a group or an individual. In a one-shot prisoner’s dilemma game with third party punishment, we find groups punish more when the penalty embeds deterrence than when it can only be retributive. In contrast, individual third parties’ punishment decisions do not vary on whether the punishment has any deterrent effect. In general, third party groups are less likely to impose punishment than individuals even though the punishment is costless for third parties.