Nonverbal Feedback, Strategic Signaling, and Nonmonetary Sanctioning: New Experimental Evidence from a Public Goods Game

Recent experiments show that feedback transmission can mitigate opportunistic behavior in repeated social dilemmas. Two nonexcludable explanations have been investigated: strategic signaling and nonmonetary sanctioning. This literature builds on the intuition that under both partner matching (where the same groups of players interact many times) and stranger matching (where groups change continuously), feedback may work as a nonmonetary sanctioning device, but only the former also allows for strategic signaling. Empirical evidence on the two explanations is mixed. Moreover, the usual design may give rise to confounding matching protocol effects. My experiment provides a novel empirical testbed for different channels by which feedback – costless disapproval points – may affect behavior in a repeated public goods game. In particular, it is based on a random matching scheme that neutralizes the confounding effects of different matching protocols on behavior. The transmission of feedback is found to foster prosocial behavior. The data favor the nonmonetary sanctioning explanation rather than the signaling hypothesis. This study provides a novel set of evidence that (i) communication may mitigate selfishness in social dilemmas and (ii) the source of this phenomenon may be linked to the emotional reaction that communication evokes in humans.