Do people accurately anticipate sanctions?

Kiss, Hubert János and López-Pérez, Raúl (2012) Do people accurately anticipate sanctions? SOUTHERN ECONOMIC JOURNAL, 79 (2). pp. 300-321. ISSN 0038-4038

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Abstract

We provide lab data from four different games that allow us to study whether people have accurate expectations regarding monetary sanctions (punishment/reward) and non-monetary sanctions (dis approval/approval). Although the strength of the sanction is always predicted wi th some error (particularly in the case of monetary sanctions), we observe that (i) mo st subjects anticipate correctly the sign of the average sanction, (ii) expectations co- vary with sanctions, (iii) the average expectation is very often not significantly differe nt than the average actual sanction, and (iv) the errors exhibit no systematic bias, exc ept in those situations where rewards are frequent. In this line, we find some evidence t hat punishment is better anticipated than rewards.

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