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Abstract:The expectation that non-cooperators will be punished can help to sustain cooperation, but there are competing claims about whether opportunities to engage in higher-order punishment (punishing punishment or failure to punish) help or undermine cooperation in social dilemmas. In a set of experimental treatments, we find that availability of higherorder punishment increases cooperation and efficiency when subjects have full information on the pattern of punishing, including its past history, and opportunities to punish are unrestricted. Availability of higher-order punishment reduces cooperation and efficiency if it is restricted to counter-punishing alone, if past history is unavailable, and if there is a dedicated counter-punishment stage.Keywords: collective action, social dilemma, voluntary contribution, public goods, punishment, counter-punishment, higher-order punishment.
JEL classification codes: C9, H41, D0 2Research Highlight: We conduct voluntary contribution experiments with opportunities to punish both conditional on others' contributions and conditional on others' punishments. We find that higher-order punishing opportunities increase cooperation and earnings when subjects learn of all punishments, are shown histories of past decisions, and can engage in higher-order punishment of any group member. We find that higher-order punishing opportunities reduce cooperation and earnings when subjects learn only who punished them (ego-centric information), see no history of past decisions, and higher-order punishment is limited to counter-punishing. Concern that knowing who punished whom and having opportunities to retaliate will undermine voluntary collective action is found to be unwarranted under conditions of symmetric information and punishment opportunities.3