Inequality-Seeking Punishment

Inequality aversion is a key motive for punishment, with many prominent studies suggesting people use punishment to reduce or eliminate inequality. Punishment in laboratory games, however, is nearly always designed to promote equality (e.g., rejections in standard ultimatum games) and the marginal cost of punishment is typically non-trivially positive. As a consequence, individual preferences over punishment outcomes remain largely uninformed. We here report data from a laboratory experiment using dictator games. We find that when people are treated unfairly they systematically prefer to use punishment to create advantageous inequality. Our results shed new light on human preferences over punishment outcomes, and have important implications for the design of mechanisms to deter misconduct. Acknowledgments: We wish to thank John Duffy, Vernon Smith, Roberto Weber and participants in seminars at the International ESA 2009, North American ESA 2008 and University of Pittsburgh for many useful comments. We are grateful for grants to the first author from the International Foundation for Research in Experimental Economics (IFREE-103) and to the second author from the Russell Sage Foundation.