Bettina Rockenbach and Irenaeus Wolff, Review of Behavioral Economics, 6: 19–37, 2019
- Studies a setting in which interactions work as in the usual VCM experiment, but what people have at the end of a round is what they have at the beginning of the next one (think of a bank account that is endowed with a number of tokens only once, at the beginning). This also means that punishment destroys future contribution capabilities.
- In a treatment without peer-punishment, initial contribution levels predict final wealth levels. In a treatment with punishment, this is not the case. Here, what is important is that cooperators do not start punishing non-cooperators straight away, as doing so triggers retaliation cycles. In contrast, `patient‘ administration of punishment fosters wealth.
