Social Influence on Third-Party Punishment: An Experiment

Abstract

In this paper, we study the effects of social influence on third-parties' decisions whether to engage in costly, decentralized punishment. We elicit punishment decisions both in isolation and after providing information about actual peers' punishment. We find evidence that the amount of punishment that is chosen by third-parties is influenced by their beliefs about the amount of their peers' punishment. Moreover, the larger the difference between third-parties' beliefs about the level of their peers' punishment and actual peers' punishment is, the more likely it is that third-parties will modify their initial punishment decision. We also find that third-parties with high self-regard are less affected by social influence that those with low self-regard. Finally, we disentangle the effect of Normative social influence from that of Informational social influence and we show that the former type of social influence may be effective for subjects who tend to disregard the latter.