Profit-seeking punishment corrupts norm obedience

Punishment typically involves depriving violators of resources they own such as money or labor. These resources can become revenue for authorities and thus motivate profitseeking punishment. In this paper, we design a novel experiment to provide direct evidence on the role punishment plays in communicating norms. More importantly, we provide experimental evidence indicating that if people know that enforcers can benefit monetarily by punishing, they no longer view punishment as signaling a norm violation. The result is a substantial degradation of punishment’s ability to influence behavior. Our findings draw attention to the detrimental effect of profit-seeking punishment enforcement on the efficacy of punishment. JEL classification: C91; C72; D82; D03