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Research Details
The Use and Misuse of Coordinated Punishments
Abstract
Communication facilitates cooperation by ensuring that deviators are collectively punished. We explore how players might misuse messages to threaten one another, and we identify ways in which organizations can deter misuse and restore cooperation. In our model, a principal plays trust games with a sequence of short-run agents who communicate with one another. An agent can shirk and then extort pay by threatening to report that the principal deviated. We show that these threats can completely destroy cooperation. Investigations of the agents' efforts, or dyadic relationships between the principal and each agent, can deter extortion and restore some cooperation. Investigations of the principal's action, on the other hand, typically don't help. Our analysis suggests that collective punishments improve cooperation only if they are designed with an eye towards discouraging misuse.
Type
Working Paper
Author(s)
Daniel Barron, yingni guo
Date Published
2019
Citations
Barron, Daniel, and yingni guo. 2019. The Use and Misuse of Coordinated Punishments.
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