Franziska Tausch

A Must Lie Situation: Avoiding Giving Negative Feedback

We examine under what conditions people provide accurate feedback to others. We use feedback regarding attractiveness, a trait people care about, and for which objective information is hard to obtain. Our results show that people avoid giving accurate face-to-face feedback to less attractive individuals, even if lying in this context comes at a monetary cost to both the person who gives the feedback and the receiver. A substantial increase of these costs does not increase the accuracy of feedback. However, when feedback is provided anonymously, the aversion to giving negative feedback is reduced.

Inherited Institutions: Cooperation in the Light of Democratic Legitimacy

We experimentally investigate whether the procedural history of a sanctioning institution affects cooperation in a social dilemma. Subjects inherit the institutional setting from a previous generation of subjects who either decided on the implementation of the institution democratically by majority vote or were exogenously assigned a setting. In order to isolate the impact of the voting procedure, no information about the cooperation history is provided. In line with existing empirical evidence, we observe that in the starting generation cooperation is higher (lower) with a democratically chosen (rejected) institution, as compared to the corresponding, randomly imposed setting. In the second generation, the procedural history only partly affects cooperation. While there is no positive democracy effect when the institution is implemented, the vote-based rejection of the institution negatively affects cooperation in the second generation. The effect size is similar to that in the first generation.

Institutional Endogeneity and Third-party Punishment in Social Dilemmas

This paper studies experimentally how the endogeneity of sanctioning institutions affects the severity of punishment in social dilemmas. We allow individuals to vote on the introduction of third-party-administered sanctions, and compare situations in which the adoption of this institution is endogenously decided via majority voting to situations in which it is exogenously imposed by the experimenter. Our experimental design addresses the self-selection and signaling effects that arise when subjects can vote on the institutional setting. We find that punishment is significantly higher when the sanctioning institution is exogenous, which can be explained by a difference in the effectiveness of punishment. Subjects respond to punishment more strongly when the sanctioning institution is endogenously chosen. As a result, a given cooperation level can be reached through milder punishment when third-party sanctions are endogenous. However, overall efficiency does not differ across the two settings as the stricter punishment implemented in the exogenous one sustains high cooperation as subjects interact repeatedly.