Prosocial Behavior and the Individual Normative Standard of Fairness within a Dynamic Context: Experimental Evidence

Abstract

In this paper, we present an experimental study of prosocial behavior and individual normative standards of fairness under the novel context of a dynamic dictator game. In addition, we explore the role of informal institutions in shaping individuals' cooperation within the domain of a public goods game under its direct exposure and in subsequent prosociality beyond its reach in the domain of the dictator game. We find that dictators' average offers in our study are quite close to the typical results found in other dictator game experiments and they are quite stable over two periods. However, dictators become more selfish after they have had the experience of playing a public goods game with peer punishment. Interestingly, we found that dictators act significantly more selfishly relative to their own declared individual normative standard of fairness. Furthermore, our experiment reveals a large share of antisocial punishment in the public goods game and a peer-to-peer punishment mechanism to be an inefficient tool to promote cooperation, however in an environment that rules out a suitable normative consensus and collective choice.