Abstract
Punishment typically involves depriving violators of resources they own such as money or labor. These resources can become revenue for authorities and thus motivate profit seeking punishment. In this paper, we design a novel experiment to provide direct evidence on the role punishment plays in communicating norms. Importantly, this allows us to provide experimental evidence indicating that if people know that enforcers can benefit monetarily by punishing, they no longer view punishment as signaling a norm violation. The result is a substantial degradation of punishment’s ability to influence behavior. Our findings draw attention to the detrimental effect of profit-seeking enforcement on the efficacy of punishment.
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