L8: emotions and economic decision making: Fehr and Gachter (1999)

Question 1

What did Fehr and Gachter (1999) examine?

Answer 1

Do people feel negative emotions towards free riders? What’s the relationship between emotions and costly punishment?

Question 2

What was Fehr and Gachter’s (1999) hypothesis?

Answer 2

Free-riding causes strong negative emotions among co-operators and that these emotions trigger willingness to punish free riders

Question 3

Explain the design of Fehr and Gachter (1999)?

Answer 3

PGG: subjects given different contribution scenarios
After READING the scenario subjects had to indicate from 1 (none) to 7 (very much) the intensity of negative feelings they had

Question 4

What were the two treatments, and thus scenarios used in those treatments in Fehr and Gachter (1999)?

Answer 4

T1:
Scenario 1 and 1’: non-free riders contribute relatively more in S1, and less in S1’

T2:
Scenario 2 and 2’: subjects hypothetically put in free riders shoes; had to indicate their expectation about intensity of other players’ anger & annoyance (2’ contribute less and 2 contribute more)

Question 5

3 main findings of Fehr and Gachter (1999)?

Answer 5

1) Free riders trigger v. strong -ve emotions in other subjects if they contribute more
2) -ve feelings anticipated by a free rider of contributors are higher than reality
3) In S1’ & S2’, both the anticipated and actual negative emotions towards free rider are relatively less but still considerable