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RESEARCH PRODUCT

Pool punishment in public goods games: How do sanctioners’ incentives affect us?

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Abstract Centralized sanctioning in social dilemmas has been shown to increase efficiency with respect to standard decentralized peer punishment. In this context, we explore the impact of sanctioners’ motivations through their payoff scheme, not only on their actions but also on the actions of the monitored individuals. To do so, we compare the implementation of two different payoff schemes for the monitor in a centralized sanctioning framework: (i) a fixed payoff scheme and (ii) a variable payoff scheme contingent on the level of cooperation achieved. We find that providing the sanctioner with a contingent payoff has a negative impact on contributions. This occurs although sanctioners implement more punishment when endowed with this payoff scheme. We argue that differences in contributions are not driven by the punishment strategy, by but the nature of the monitor’s payoff scheme. To support this idea, we run a control treatment where the monitor is a mere “observer” with either a fixed or a contingent payoff. Contributions are still lower when the observer receives a contingent payoff than a fixed payoff. Hence, differences in contributions are, in fact, driven by what we denominate as an indirect free-rider aversion.