Nonmonetary sanctions and rewards in an experimental coordination game

Subhasish Dugar

Journal of Economic Behavior & Organization, 2010, vol. 73, issue 3, 377-386

Abstract: A growing body of experimental research documents that nonmonetary sanctions and rewards may be important instruments for enforcing efficient behavior. This study contributes to this literature by reporting results from a laboratory experiment. The experiment is designed to test whether nonmonetary sanctions or rewards alone can yield the optimal level of efficiency in a game with Pareto-ranked equilibria. Performance based disapproval and approval ratings, assigned by group members, are used as proxies for nonmonetary sanction and reward, respectively. Although these ratings are costless and payoff neutral, results show that expression of disapproval facilitates coordination on the most efficient equilibrium. In contrast, statement of approval induces subjects to converge towards the most inefficient outcome. We conclude that induced approval and disapproval ratings have asymmetric behavioral effects on coordination.

Keywords: Coordination; games; Nonmonetary; sanction; Reward; Experiment (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (46)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167-2681(09)00274-1
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:73:y:2010:i:3:p:377-386

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().