Punishment, Counterpunishment and Sanction Enforcement in a Social Dilemma Experiment

We present the results of an experiment that explores the sanctioning behavior of individuals who experience a social dilemma. In the game we study, players choose contribution levels to a public good and subsequently have multiple opportunities to reduce the earnings of the other members of the group. The treatments vary in terms of individuals' opportunities to (a) avenge sanctions that have been directed toward themselves, and (b) punish others' sanctioning behavior with respect to third parties. We find that the individuals avenge sanctions they have received, punish those who fail to sanction third parties, and punish low contributors, even when punishment is costly to the sanctioner. When there are five rounds of unrestricted sanctioning, contributions and welfare are significantly lower than when only one round of sanctioning opportunities exists, and welfare is lower than the zero-cooperation benchmark.