Experimental evidence shows that ulterior motive attribution drives counter-punishment

Evidence shows that the willingness of individuals to avenge punishment inflicted upon them for transgressions they committed constitutes a significant obstacle toward upholding social norms and cooperation. The drivers of this behavior, however, are not well understood. We hypothesize that ulterior motive attribution-the tendency to assign ulterior motives to punishers for their actions-increases the likelihood of counter-punishment. We exogenously manipulate the ability to attribute ulterior motives to punishers by having the punisher be either an unaffected third party or a second party who, as the victim of a transgression, may be driven to punish by a desire to take revenge. We show that survey respondents consider second-party punishment to be substantially more likely to be driven by ulterior motives than an identical, payoff-equalizing punishment meted out by a third party. In line with our hypothesis, we find that second-party punishment is 66.3% more likely to trigger counter-punishment than third-party punishment in a lab experiment. The loss in earnings due to counter-punishment is 64.6% higher for second-party punishers than third-party punishers, all else equal.