Intermediation Reduces Punishment (and Reward) | Zendy

Lucas C. Coffman | Zendy

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Intermediation Reduces Punishment (and Reward)

Author(s) -

Lucas C. Coffman

Publication year - 2011

Publication title -

american economic journal microeconomics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 5.339

H-Index - 40

eISSN - 1945-7685

pISSN - 1945-7669

DOI - 10.1257/mic.3.4.77

Subject(s) - intermediation , intermediary , punishment (psychology) , equity (law) , financial intermediary , database transaction , outcome (game theory) , business , transaction cost , microeconomics , economics , monetary economics , psychology , social psychology , marketing , finance , political science , law , computer science , programming language

This paper shows moral decision making is not well predicted by the overall fairness of an act but rather by the fairness of the consequences that follow directly. In laboratory experiments, third-party punishment for keeping money from a poorer player decreases when an intermediary actor is included in the transaction. This is true for completely passive intermediaries, even though intermediation decreases the payout of the poorest player and hurts equity, and because intermediation distances the transgressor from the outcome. A separate study shows rewards of charitable giving decrease when the saliency of an intermediary is increased. (JEL A13, D63, D64)

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