Enforcement of Fairness Norms by Punishment: A Comparison of Gains and Losses.

Although in everyday life decisions about losses are prevalent (e.g., the climate crisis and the COVID-19 crisis), there is hardly any research on decisions in the loss domain. Therefore, we conducted online experiments with a sample of 672 participants (mostly students), using third-party punishment dictator games (DGs) in the loss domain to explore the impact of losses and punishment threats on the conformity to the fairness norm. Subjects in the treatment condition have to divide a loss of -10 € with the threat of a third-party punishment with different strengths (control: gains, no punishment). Overall, the statistical evidence seems rather weak, but when it comes to losses, subjects are more rational and straightforward with their words and deeds than with gains. Therefore, in the loss domain, subjects are more likely to believe that the fairness norm should be followed, and they subjectively perceive that the others do as well. Furthermore, although dictators' decisions are more selfish in the loss domain, dictators there react more strongly to the punishment threat by reducing their demands than in the gains domain. This holds as long as the punishment threat is strong enough, as judged from a rational perspective.

Experiments on norm focusing and losses in dictator games.

We conducted experiments on norm focusing. The tests were carried out with two versions of dictator games: in one version of the game, the dictator had to allocate a gain of €10, while in the other version, a loss of €-10 needs to be allocated. In a first treatment, we focused subjects on the average giving in similar previous dictator games. The second treatment focused subjects on the behaviour of what a self-interested actor should do. In total, N = 550 participants took part in our experiments. We found (1) a significant difference in giving behaviour between gain and loss treatments, with subjects being moderately more self-interested in the loss domain, (2) a significant effect of focusing subjects on the average behaviour of others, but (3) no effect of focusing subjects on the behaviour of self-interested actors.