Punishment in Public Goods Games in Japan Yukihiko Funaki, Robert Veszteg (Waseda U)早稻田大學 Masao Ogaki (Keio U), and Simon Gächter, Fumio Ohtake Seminar in National Tsing Hua Univ.　国立清華大學 March 6, 2014

What do we do? We follow Herrmann, Thöni, and Gächter (Science 2008, HTG) and Yamagishi (Social Psychology Quarterly 1988) to do linear Public Goods Game (PGG) experiments with and without costly punishment in Japan. We also implemented intermediate experiments of the two. Our findings: (1)Punishment behavior in Japan is different from other countries. (2)The HTG and Yamagishi punishment rules cause very different behaviors in Japan. (3)Behavior in the intermediate one is close to Yamagishi rules.

Rules of punishment HTG rules: An individual can punish anyone a free rider: Altruistic punishment a higher contributor: Antisocial punishment Yamagishi rules: An individual contributes to a punishment fund, which only punishes the free riders (those who contribute the lowest amount). Intermediate rules: explained later

Herrmann, Thöni, and Gächter (2008) HTG did comparable experiments in 16 countries including China and Korea, but not in Japan. They used PGG with and without punishment in Fehr and Gächter (AER 2000) with the partner matching (10 rounds with the same players) Treatment N: 4 person PGG game (Baseline) Treatment P: Individual Punishment Opportunity i’s punishment cost for j

HTG punishment and culture HTG punishment rules worked very well to promote cooperation in US, Europe, and East Asia (China and Korea) HTG punishment rules did not work well in Greece, Turkey, and Arabic speaking countries: Antisocial punishment was high in these countries. From these results, one might expect that Japan would show similar results as in China and Korea, Our experiment on January 18, 2012 at Waseda in Tokyo. Z-tree program, 60 participants, undergraduate students of several majors

Japan is different: Left: N(PGG), Right: P(HTG)

The difference is NOT from antisocial punishment in Japan

Yamagishi (1988) Yamagishi compared Japan and US for PGG with and without costly punishment. Punishment worked better to promote cooperation in Japan than in the United States. (Opposite from our results!) Different Punishment mechanism There is a FUND to punish the lowest contributor(s) automatically. Subjects can contribute to the FUND. There are some important differences in Yamagishi’s procedure other than punishment rules: E.g., Subjects answered a general trust question one week prior to the experiment, and the middle 20% subjects were excluded from the experiment recruiting.

Our second experiment (Yamagishi treatment) Punishment rules or other differences? Our 2013 experiments at Waseda and Osaka Universities: Exactly same as the HTG procedure except for Yamagishi FUND punishment rules. (LJP treatment) Very similar instructions, screens, procedures 18 Jan. , 16 May 2013, at Waseda, 40 participants 4 Feb. 7 March 2013, at Osaka, 48 participants Yamagishi rules work better than HTG rules in Japan for the purpose of promoting cooperation.

P (HTG) vs LJP (Yamagishi) Contribution

P (HTG) vs LJP (Yamagishi) Profit

Yamagishi punishment rules work better in Japan Two possible reasons: Punishment works better if it is only allowed to punish free riders. Japanese punish more if the punishment is done through a punishment fund rather than individually (framing effect) We implemented other two intermediate treatments Treatment LP: HTG punishment rule with a restriction that only the free riders (lowest contributors) are punished Treatment Pframing: HTG punishment rule with a framing of FUND

Intermediate Treatment LP HTG punishment rules with a restriction that only the lowest contributor(s) are punished Very similar instruction, screens, procedure 26 Feb., 16 May 2013, Waseda, 40 participants 7 March 2013, Osaka,48 participants This mechanism works well like Yamagishi rules and better than HTG rules in Japan for the purpose of promoting cooperation.

LP vs LJP (Yamagishi) Contribution

LP vs LJP (Yamagishi) Profit

Treatment Pframing 15,16 May 2013, at Waseda, 40participants HTG punishment rules with framing by the word FUND. Very similar instruction, screens, procedure 15,16 May 2013, at Waseda, 40participants No significant difference from P treatment

Treatment Pframing

LJP(Yamagishi) and LP are important It is important to restrict that only the lowest contributor(s) can be punished. This effect is more important than FUND system. We combine LJP and LP into L . Why L is important? Someone might like contributing a large amount to the public good. However he/she might be afraid to be punished in an antisocial way.

P vs L=LJP+LP Contribution

P vs L=LJP+LP punishment cost

P vs L=LJP+LP punishment opportunity used

Individual contributions (summary)

Individual profit (summary)

Punishment cost (summary)

Punishment opportunities (summary)

Who punishes whom? There is a lot of punishment targeting free riders, but also antisocial punishment targeting higher contributors. How can we explain this? Punishment for free riders vs antisocial punishment

Not small number of antisocial punishment

Punishment cost (summary)

Punishing free riders is similar.

Punishment frequency (summary)

Antisocial P increasing first then decreasing

Highest and Lowest contributors punish each other. Punishee (TREATMENT P) Punishee (TREATMENT L=LJP+LP) Punisher highest contr. above-average (ex. highest) below-average (ex. lowest) lowest contr. total (total) highest CONTRIBUTOR 2 4 26 143 175 294 0.58 1.16 7.54 41.45 50.72 74.24 (ex.highest) 1 42 47 60 0.29 0.00 12.17 13.62 15.15 (ex.lowest) 3 36 45 0.87 10.43 13.04 10.61 lowest contributor 34 13 12 19 78 9.86 3.77 3.48 5.51 22.61 40 20 240 345 396 11.59 5.80 69.57 100.00

Who punishes whom? Highest contributors punish the Lowest most often. Lowest contributors get punished by the Highest most. Lowest contributors punish the Highest most.(Antisocial) From the beginning, Highest punishes Lowest constantly. Antisocial punishment by the Lowest is increasing till the middle period. Antisocial punishment by the Lowest is decreasing after the middle period.

Story First the Lowest contributors did not recognized to be punished. They got understood that the Lowest would get punished from the others. (They do not know who punished them.) They think that a punishment by the Highest is most possible. The Lowest aims to revenge the Highest before he/she will be punished. ⇒ not many punishments by the Highest in P treatment & many punishments by the Highest in L treatment ⇒ L restriction works well

Tentative Conclusions Japanese culture of punishment is very unique HTG punishment rules did not work not because of antisocial punishment but for other reasons unlike the HTG results HTG punishment rules worked well in US, Europe, China, and Korea It is better to restrict punishment to free riders, the Lowest contributors, in Japan In Japan, punishment is usually targeted to a small group Effect of framing of a punishment FUND is weak. Leader punished free riders and, free riders punished the leader. In Japan, to be a conspicuous leader should be avoided.

Japanese Proverbs A stake that sticks out gets hammered down. 出る杭は打たれる Great winds blow on high hills.