Punishment credibility and cooperation in public good games

This paper investigates the efficacy of a punishment mechanism in promoting cooperative behaviour in a public goods game when punishment enforcement is risky. Experimental studies have found that a sanctioning system can induce individuals to adopt behaviour deemed socially acceptable in such games. Our experiment qualifies this result by showing that a sanctioning system can only promote cooperative behaviour if subjects perceive punishment enforcement as a high-probability event. This result supports the view that sanctioning systems can only induce people to comply with social norms that enhance efficiency if such systems are sufficiently credible. We also find that the more punishment points towards a player were not being enforced in the history of the game, the more punishment from others was directed to them. This suggests that bygones are not bygones and that punishment behaviour attempts to compensate for the history of free-riding that goes unpunished.