Punishment as a mechanism to maintain bilateral cooperation: A social behavior experiment

• Yuling Liao

  Central South University and Hunan University of Finance and Economics

• Kairong Hong

  Central South University

• Liang Zhang

  Central South University

We designed 3 social behavior experiments involving compensation for real estate expropriation. We recruited 88 students at a university in China as our participants, and investigated the impact of third-party punishment on bilateral cooperation in a laboratory setting. The results showed the heterogeneity of human behavior in the different experiment types. In addition, results showed that the potential impact of punishment became more powerful by adding a third party. Finally, a third party had low punishment costs and a significantly higher probability of actually imposing punishment than did a second party. Results showed that, compared with second-party punishment, third-party punishment is more conducive to the maintenance of bilateral cooperation.

1. Yuling Liao, Central South University and Hunan University of Finance and Economics
   School of Business, and Department of Legal and Public Administration
2. Kairong Hong, Central South University
   School of Business
3. Liang Zhang, Central South University
   School of Business

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