COUNTER-PUNISHMENT, COMMUNICATION AND COOPERATION AMONG PARTNERS December 22nd, 2015

We study how communication affects cooperation amon g partners in a public goods environment with punishment and counter-punishment opportunitie s. The two dimensions of communication we study are asking for a specific contribution level and having to express oneself when choosing to counter-punish. We conduct four experimental treatm nts, all involving a contribution stage, a punishment stage and a counter-punishment stage. In the first treatment communication is not possible at any of the stages. The second treatment allows participants to ask for a contribution leve l at the punishment stage and in the third treatment participants are required to send a message if they decide to counter-punishment. The fourth combines t h two communication channels of the second and third treatments. We find that the three treatm nts involving communication at any of the two relevant stages lead to significantly higher contri butions than the baseline treatment. We find no difference between the three treatments with commun ication. We also relate our results to previous results from treatments without counter-punishment opportunities and do not find that the presence of counter-punishment leads to lower cooperation le vel. The overall pattern of results shows that the key factor is the presence of communication. Whenev r it is possible contributions are higher than when it is not, regardless of counter-punishment op portunities. Acknowledgements The work presented in this paper has been performed in the frame of the MacNorms project (Intramurales d frontera CSIC – PIF08-007) and of the GLODERS project (Seven th Framework EU Programme FP7/2007-2013 Grant: 315874). The authors thank the Institute of Cogniti ve Sciences and Technologies (ISTC-CNR, Rome), the European University Institute, the Spanish Ministry of Econo mics and Competitiveness (Grant: ECO2014-59302-P) a nd the Generalitat de Catalunya (Grant: 2014 SGR 510) for research support. The au thors thank Guillem Pons for excellent research assistance.