Understanding the fundamental patterns and determinants of human cooperation and the maintenance of social order in human societies is a challenge across disciplines. The existing empirical evidence for the higher levels of cooperation when altruistic punishment is present versus when it is absent systematically ignores the institutional competition inherent in human societies. Whether punishment would be deliberately adopted and would similarly enhance cooperation when directly competing with nonpunishment institutions is highly controversial in light of recent findings on the detrimental effects of punishment. We show experimentally that a sanctioning institution is the undisputed winner in a competition with a sanction-free institution. Despite initial aversion, the entire population migrates successively to the sanctioning institution and strongly cooperates, whereas the sanction-free society becomes fully depopulated. The findings demonstrate the competitive advantage of sanctioning institutions and exemplify the emergence and manifestation of social order driven by institutional selection.

Essential characteristics of corruption are (1) reciprocity relationships between bribers and public officials, (2) negative welfare effects, and (3) high penalties when discovered. We separate the influences of these factors in an experiment. In a two-player game reciprocation is economically inefficient through negative externalities. A control treatment without externalities is also conducted. In a third, so-called sudden death treatment, corrupt pairs face a low probability of exclusion from the experiment without payment. The results show that reciprocity can establish bribery relationships, where negative externalities have no apparent effect. The penalty threat significantly reduces corruption, although discovery probabilities are typically underestimated.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 5968 September 2011 ABSTRACT Lying and Team Incentives *We investigate the influence of two widespread compensation schemes, individual piecerates and team incentives, on participants' inclination to lie, by adapting the experimental setup of Fischbacher and Heusi (2008). Lying turns out to be more pronounced under team incentives than under individual piece-rates, which highlights a so far fairly neglected feature of these compensation schemes.JEL Classification: C91, C92, M52

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes.You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. licence. www.econstor.eu Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated D I S C U S S I O N P A P E R S E R I E SThe Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Fehr, Georg Kirchsteiger, and Arno Riedl, 1993, Fehr, Simon Gächter, and Kirchsteiger, 1997, Fehr, Erich Kirchler, Andreas Weichbold, and Gächter, 1998, Fehr and Falk, 1999, Fehr and Gächter, 2000, Charness 2004, Jordi Brandts and Charness, 2004, Bernd Irlenbusch and Dirk Sliwka, 2005, Charness and Peter Kuhn, 2007.4 treatment in which we allow the four players to communicate with each other by broadcasting text messages. Communication curbs sabotage since players agree on flat prize structures and increased output which is in line with previous findings that 'cheap-talk' often helps to improve efficiency (for a survey, see Vincent P. Crawford, 1998).Reliable empirical data on sabotage behavior in tournaments is almost non-existent. In an early questionnaire study, Robert W. Drago...

Microfinance programs provide poor people with small loans given to jointly liable self‐selected groups. Follow‐up loans provide incentives to repay. We experimentally investigate the influence of those features on strategic default. Each group member invests in an individual risky project, whose outcome is known only to the individual investor. Subjects decide whether to contribute to group repayment or not. Only those with successful projects can contribute. The experiment ends if too few repay. We investigate group size and social ties effects and observe robust high repayment rates. Group lending outperforms individual lending. Self‐selected groups show high but less stable contributions. (JEL C90, H41, I38, O16, Z13)

In corporate contests, employees compete for a prize. Ideally, contests induce employees to exert productive effort which increases their probability of winning. In many environments, however, employees can also improve their own ranking position by harming their colleagues. Such negative incentive effects of corporate contests are largely unexplored, which can partly be attributed to the fact that sabotaging behavior is almost unobservable in the field. In this study we analyze behavior in experimental contests with heterogeneous players who are able to mutually sabotage each other. We find that sabotaging behavior systematically varies with the composition of different types of contestants. Moreover, if the saboteur’s identity is revealed sabotage decreases while retaliation motives prevail. Our results promise to be valuable when designing corporate contests.Bullying, Contest, Experiments, Sabotage, Tournament, C91, J33, J41, C72,

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