Group Identity and Pro-Social Punishment

Cooperation is important but difficult to achieve in social dilemmas. It is even more challenging to promote cooperation among individuals from diverse backgrounds. In this paper, we design a lab experiment to investigate how group identity influences cooperation and peer punishment under the voluntary contribution mechanism of public goods. Artificial groups are created in the lab through randomization, and group identity is further enhanced via a problem solving task. Then participants choose their individual contributions to a global public good, and can assign costly punishment points to one another. We find that monetary punishment leads to an increase in the public goods contributions, and the impact is greater in the treatments with groups than in the baseline without groups. In addition, participants punish ingroup under-contributors more severely. However, these effects are significant only when all the participants are made aware that the punishers’ group identities are to be revealed to the punishees. Our results also show that punishees react to punishment more positively in the treatments with groups than in the baseline without groups. Our findings suggest the potentials of monetary punishment, combined with the information of group identities, in increasing public goods contributions in communities that consist of different social groups.