Ostracism and theft in heterogeneous groups

Ostracism, or exclusion by peers, has been practiced since ancient times as a severe form of punishment against transgressors laws social norms. The purpose this paper is to offer comprehensive analysis on how ostracism affects behavior and the functioning group. We present data from laboratory experiment, in which participants face dilemma allocate limited resources between productive activity theft, are given opportunity exclude members their group means majority voting. Our main treatment features an environment with heterogeneity productivity within groups, thus creating inequalities economic opportunities income. find that effective decreases theft excluded once they re-admitted into However, it also leads some retaliation low-productivity members. A particularly worrisome aspect punished stigmatized have higher probability facing again. discuss implications our findings for penal systems capacity rehabilitate prisoners.