posted on 2005-06-01, 00:00authored byDaniel Houser, Erte Xiao, Kevin McCabe, Vernon Smith
People can become less cooperative when threatened with sanctions, and
previous research suggests both "intentions" and incentives underlie this effect. We report
data from an experiment aimed at determining the relative importance of intentions and
incentives in producing non-cooperative behavior. Participants play a one-shot
investment experiment in pairs. Investors send an amount to trustees, request a return on
this investment and, in some treatments, can threaten sanctions to enforce their requests.
Decisions by trustees facing threats imposed (or not) by investors are compared to
decisions by trustees facing threats imposed (or not) by nature. When not threatened,
trustees typically decide to return a positive amount less than the investor requested.
When threatened this decision becomes least common. If the request is large relative to
the sanction then most trustees return nothing. If the request is small, trustees typically
return the requested amount. These results do not vary with investors’ intentions.