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IMMATERIAL REWARDS AND SANCTIONS IN A VOLUNTARY CONTRIBUTION EXPERIMENT

Authors

  • RONALD PEETERS,

    1. Peeters: Associate Professor, Department of Economics, Maastricht University, Maastricht, The Netherlands. Phone +31-43-3883730, Fax +31-43-3884878, E-mail r.peeters@maastrichtuniversity.nl
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  • MARC VORSATZ

    1. Vorsatz: Ramón y Cajal Researcher, Fundación de Estudios de Economía Applicada (FEDEA), Madrid, Spain. Phone +34-914-359-209, Fax +34-915-779-575, E-mail mvorsatz@fedea.es.
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    • We thank the participants in the Behavioral & Experimental Economics meetings at Maastricht University, Dakshina De Silva, Simon Gächter, Friederike Mengel, Helena Veiga, and two anonymous referees for their helpful suggestions. Financial support by the Netherlands Organisation for Scientific Research (NWO) and the Spanish Ministry of Education and Science (through the Ramón y Cajal program and the project ECO2009-07530) is gratefully acknowledged.


Abstract

In this article, we compare the causes and effects of immaterial rewards and sanctions on cooperation in a voluntary contribution experiment. It appears that both rewards and sanctions increase contributions (and that rewards are more effective than sanctions) only when subjects interact repeatedly within the same group. The effect is, however, insignificant, which could be due to the higher variance in presence of rewards and sanctions. Furthermore, it is evidenced that rewards have some negative effect on the future contribution for both the imposer and the imposed when the partner matching is applied, but both rewards and sanctions have mainly positive effects under the stranger matching. Thus it seems that the recipient of the feedback takes the message as a reliable external evaluation of her contribution only under the stranger matching protocol when the strategic use of feedback can largely be excluded. (JEL C92, H41)

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