Lucas Coffman, Business Economics PhD
Dissertation Chair: Professor Al Roth
Intermediation Reduces Punishment (And Reward)
In laboratory and framed field experiments, actors receive substantially less punishment or reward when they use an intermediary actor, even a passive one, to sever the direct link between an action and its consequence. In the laboratory component, keeping money at the expense of a poorer player is punished less when done through an intermediary, even when the intermediary is not involved in selecting the outcome. Even subjects who (correctly) believe intermediation leads to more unequal outcomes or that intermediation is explicitly used to avoid punishment, punish intermediation less. Thus the participants think through the steps of logic and identify the first mover as responsible, but this is not revealed in their punishment decisions. Consequently, profit-maximizers have incentives to work with a third party, which substantially reduces pro-sociality of outcomes. In the online framed field experiment, reward of charitable behavior decrease when the acts of charity are done through an intermediary. Taken together, this paper finds that punishment and reward are impacted by the directness of actions, which is orthogonal to welfare. This suggests that punishment and reward are not strictly used to align individual incentives, but rather that moral decision-making is an unreasoned, intuitive response to observed behaviors, unreliable alone in enforcing pro-social equilibria.
