Daniela Grieco | Università degli Studi di Milano - State University of Milan (Italy) (original) (raw)

Papers by Daniela Grieco

Three main motivations can explain compliance with social norms: fear of peer punishment, the des... more Three main motivations can explain compliance with social norms: fear of peer punishment, the desire for others' esteem and the desire to meet others' expectations. Though all play a role, only the desire to meet others' expectations can sustain compliance when neither public nor private monitoring is possible. Theoretical models have shown that such desire can indeed sustain social norms, but empirical evidence is lacking. Moreover it is unclear whether this desire ranges over others' “empirical” or “normative” expectations. We propose a new experimental design to isolate this motivation and to investigate what kind of expectations people are inclined to meet. Results indicate that, when nobody can assign either material or immaterial sanctions, the perceived legitimacy of others' normative expectations can motivate a significant number of people to comply with costly social norms.

SSRN Electronic Journal, 2000

Excess entry refers to the high failure rate of new entrepreneurial ventures. Economic explanatio... more Excess entry refers to the high failure rate of new entrepreneurial ventures. Economic explanations suggest "hit and run" entrants and risk-seeking behavior. A psychological explanation is that people (entrepreneurs) are overconfident in their abilities .

∗ The authors' names are listed alphabetically. They thank Carlos Trujillo, Julian Rode, and... more ∗ The authors' names are listed alphabetically. They thank Carlos Trujillo, Julian Rode, and Enric Soria for help in conducting the experiments. They have also benefited from the helpful comments of Michele Bernasconi, Christian Garavaglia, Franco Malerba, Don Moore, ...

Journal of Economic Psychology, 2009

Studies have found that people are overconfident in estimation involving difficult tasks but unde... more Studies have found that people are overconfident in estimation involving difficult tasks but underconfident in easy tasks. Conversely, they are overconfident in placing themselves in easy tasks but underconfident in hard tasks. These findings can be explained by a regression hypothesis that implies random errors in estimation as well as by rational Bayesian updating (that implies no random error). We test these hypotheses in five experiments. We find overconfidence in estimation involving hard tasks but underconfidence in easy tasks. However, for placement (involving both easy and hard tasks) we find no overconfidence, regression effects due to low and high anchor points, and extreme underconfidence when people choose between multiple alternatives. On the other hand, when given precise information about absolute performance, people's re-assessments of relative performance are consistent with the Bayesian model. Since placement judgments are important in many competitive settings, our results emphasize the need for more research to identify their determinants.

The ability to comply with social norms is a feature that is unique to human cooperation. It has ... more The ability to comply with social norms is a feature that is unique to human cooperation. It has been suggested that norm compliance is motivated by a desire to meet others’ expectations. We present an experiment designed to disentangle two possible motivations to meet others’ expectations: guilt aversion and perceived legitimacy. According to the theory of guilt aversion it is sufficient to desire not to disappoint others’ payoff expectations; according to the latter motivation not all expectations matter but only those are perceived as legitimate. A promise is a powerful way to make a social norm salient and to make expectations on our behavior legitimate. We find evidence that supports the hypothesis that others' expectations on one's own behavior matter only when they are perceived as legitimate.

In this paper we introduce the “extortion game” and propose a set of experiments aimed at studyin... more In this paper we introduce the “extortion game” and propose a set of experiments aimed at studying both the extorter’s and the victim’s behavior. The primary focus of our experiments is understanding what determines both the extent of the extortive request and the victim’s reaction in terms of compliance. Our results show that the extorter’s requests are proportional to the victim’s earnings, similar across victims and positively correlated with the level of request the extorter perceives as “fair”. Punishment is rare and the extorted sums are rather small. Results also shed light on the motivations that make a victim compliant with extortive requests, confirming that punishment plays a role in promoting compliance, but also showing the importance of other concurrent factors like information about peers’ behavior and the perceived fairness of the request. Overall, our results indicate that fairness concerns matter even in a context of extra-legal taxation, shaping both extorters’ requests and victims’ compliance.

Creativity is a complex and multi-dimensional phenomenon with tremendous economics importance. Y... more Creativity is a complex and multi-dimensional phenomenon with tremendous economics importance. Yet, despite this importance, there is very little work on the topic in the economics literature. In this paper, we consider the effect of incentives on creativity. We present a first series of experiments on individual creativity where subjects face creativity tasks where, in one case, ex-ante goals and constraints are imposed on their answers, and in the other case no restrictions apply. The effects of financial incentives in stimulating creativity in both types of tasks is then tested, together with the impact of personal features like risk and ambiguity aversion. Our findings show that, in general, financial incentives affect “closed” (constrained) creativity, but do not facilitate “open” (unconstrained) creativity. However, in the latter case incentives do play a role for ambiguity-averse agents, who tend to be significantly less creative and seem to need extrinsic motivation to exert effort in a task whose odds of success they don’t know. The second set of experiments aims at exploring group creativity in contexts where corporate culture promotes cooperation or competition among group members. Our results show that, in the case of closed tasks, financial incentives and collectivist attitudes foster creativity, but only with cooperative corporate culture.

The paper presents the results of a lab-in-the-field experiment in three South African townships ... more The paper presents the results of a lab-in-the-field experiment in three South African townships located in the suburbs of Cape Town. The experimental design consists of a set of decisions on how the members of a naturally occurring group allocate an endowment to a private or to a public account. In our treatments, we first manipulate the degree of participation of group members in the choice of the public good, from involvement of the group leader only, to collective discussion and to private voting. Additionally, we explore the effectiveness of monetary incentives (collective versus individual) set in order to promote participation. The results show that leader guidance and participatory incentives significantly raise cooperation and hold after controlling for a wide set of individual and group characteristics.

We experimentally investigate a finitely repeated public goods game setting where, in each round,... more We experimentally investigate a finitely repeated public goods game setting where, in each round, access to sanctioning power is exclusively awarded to one single player per group. We show that our central ‘Top Contributors as Punishers’ institution – a mechanism by which a player needs to be the highest contributor in her group in order to earn the right to sanction others – is extremely effective in raising cooperation and welfare due to turnover in the top contributor role and to top contributors’ willingness to substantially sanction others. Our findings yield implications for the design of mechanisms intended to foster cooperation in social dilemma environments.

Are buyers willing to pay more for self-insurance coverage when the probabilities of loss are amb... more Are buyers willing to pay more for self-insurance coverage when the probabilities of loss are ambiguous? Is willingness to pay affected by the source of ambiguity? This paper addresses these main research questions. Ambiguity has multiple sources: it can derive from lack of information on the context where the decision-maker operates or can be a consequence of ignorance on her own characteristics or performance. After measuring subjects’ willingness to pay when losses are risky, we relate the probability to incur in losses both to events that are ‘external’ to the individual and to occurrences that regard the individual absolute performance in a task, i.e. to ‘internal’ sources of ambiguity.

In this paper we present a novel experimental procedure aimed at better understanding the interac... more In this paper we present a novel experimental procedure aimed at better understanding the interaction between confidence and ambiguity attitudes in individual decision making. Different ambiguity settings not only can be determined by the lack of information in possible scenarios completely “external” to the decision-maker, but also can be a consequence of the decision-maker’s ignorance about her own characteristics or performance and thus deals with confidence. We design a multistage experiment where subjects face different sources of ambiguity and where we are able to control for self-assessed levels of competence. By means of a Principal Component Analysis, we obtain a set of measures of “internal” and “external” ambiguity aversion. Our regressions show that the two measures are significantly correlated at the subject level, that subjects’ “internal” ambiguity aversion increases in performance in the high-competence task and that “external” ambiguity aversion moderately increases in earnings. Self-selection does not play any role.

In the framework of a finitely repeated public goods game with costly punishment options, we intr... more In the framework of a finitely repeated public goods game with costly punishment options, we introduce a novel restrictive setup where a principle of legitimacy holds, in the sense that only virtuous behavior (that is, being a high contributor) allows one to gain access to sanctioning opportunities (‘entitlement’) and only wrongful behavior (that is, being a low contributor) makes one a potential target of peer punishment (‘desert’). As a consequence, acting virtuously guarantees that it will not be possible to be punished by less virtuous subjects (‘immunity’). These restrictions, by allowing for ‘legitimate punishment’ only, rule out by construction so called antisocial punishment as well as vengeful behavior. Moreover, we manipulate the amount of information over others’ contributions that subjects receive before making their punishment decisions. Our preliminary results show that restrictions lead to an increase of cooperation levels and virtuous restrictions combined with detailed feedback on peers’ contribution significantly increase contribution levels and make cooperation sustainable over time.

Studies have found that people are overconfident in estimation involving difficult tasks but unde... more Studies have found that people are overconfident in estimation involving difficult tasks but underconfident in easy tasks. Conversely, they are overconfident in placing themselves in easy tasks but underconfident in hard tasks. These findings can be explained by a regression hypothesis that implies random errors in estimation as well as by rational Bayesian updating (that implies no random error). We test these hypotheses in five experiments.
We find overconfidence in estimation involving hard tasks but underconfidence in easy tasks. However, for placement (involving both easy and hard tasks) we find no overconfidence, regression effects due to low and high anchor points, and extreme underconfidence when people choose between multiple alternatives. On the other hand, when given precise information about absolute performance, people’s re-assessments of relative performance are consistent with the Bayesian model. Since placement judgments are important in many competitive settings, our results emphasize the need for more research to identify their determinants.

Empirical evidence about innovation is doubtful in showing incumbent firms’ and new entrants’ att... more Empirical evidence about innovation is doubtful in showing incumbent firms’ and new entrants’ attitude toward radical innovations. Moreover, theoretical works exhibit divergent conclusions when investigating the incentives to innovate. Our paper emphasizes the importance of distinguishing between degrees of innovativeness when comparing an incumbent’s and an entrant’s incentives to invest in innovation. The model captures the peculiarity of a radical innovation along three dimension: risk, impact on the existing market and capability of opening up a new market. The results emphasize the role of substitution and
complementarity between markets in determining the incentives to innovate in the radical case. Implications on innovation policy are finally discussed.

This article analyzes a firm's decision of entering a new market—or staying outside—and considers... more This article analyzes a firm's decision of entering a new market—or staying outside—and considers five decision models—optimizing, satisficing, incremental, cybernetic, and random—and their domain of applicability in order to discuss how fit they are in describing this specific decision. Because the cybernetic decision strategy appears to be the most appropriate to deal with the entry decision, the work goes deeper into this model focusing on the degree of uncertainty that the environment represents to the decision makers and to the state of the conflict of interest that arises because this decision implies a coordination problem.

LIUC Papers in Economics, Jan 1, 2008

The pervasiveness of the entrepreneurial phenomenon draws scholars’ attention to what determines ... more The pervasiveness of the entrepreneurial phenomenon draws scholars’ attention to what determines the decision to become an entrepreneur. Entrepreneurial decisions imply judgemental decisions. Different approaches in economics conceive such judgemental decisions as firm entry, or real investment in the creation of a new business, or making a career choice in favour of a particular type of self-employment. In this paper, the literature on entrepreneurs’ features, motives, and markets is enriched with theoretical and empirical results from industrial organization, financial economics, and labour economics.
.

Empirical evidence on stock prices shows that firms investing successfully in radical innovation ... more Empirical evidence on stock prices shows that firms investing successfully in radical innovation experience higher stock returns. This paper provides a model that sheds light on the relationship between the degree of firm innovativeness and stock returns, whose movements capture expectations on firm’s profitability and growth. The model grounds on the Neo-Schumpeterian growth models setup and relies on the crucial assumption of radical innovation characterized by “ambiguity” or Knightian uncertainty: due to its uniqueness and originality, no distribution of probability can be reasonably associated to radical innovation’ success or failure. Extreme (maxmin preferences) and smoother ambiguity aversion (alpha-maxmin, Choquet) are here compared. Results show that the assumption of ambiguity-aversion is critical in determining higher returns in presence of radical innovation and the specific definition of expected utility shapes the extent of the returns. Risk attitude plays no role.

Is culture an important variable to explain whether groups can successfully provide public goods?... more Is culture an important variable to explain whether groups can successfully provide public goods?
A wealth of empirical evidence on both industrialized and developing countries shows that cooperation levels decrease in the presence of ethnic divisions. Although several laboratory works deal with cultural differences, so far most studies restrict their attention to cross-cultural comparisons among internally homogeneous societies. We depart from these contributions and conduct an intercultural public goods game with punishment experiment in Italy, a country where immigration is a quite recent, but politically hot phenomenon. We investigate the effects of introducing a varying number of foreign participants within a homogeneous pool of native subjects.
Our results indicate that foreigners contribute significantly less than natives, natives react lowering their own contribution levels, and, consequently, the degree of cultural diversity negatively affects the overall level of cooperation. In terms of sanctioning, we observe no difference in the overall amount of assigned and received punishment points; however, behaving mostly as free-riders, foreigners are more likely to use anti-social punishment. In the absence of institutional restrictions ruling out anti-social punishment, this might amplify the documented detrimental effect on cooperation.

Three main motivations can explain compliance with social norms: fear of peer punishment, the des... more Three main motivations can explain compliance with social norms: fear of peer punishment, the desire for others' esteem and the desire to meet others' expectations. Though all play a role, only the desire to meet others' expectations can sustain compliance when neither public nor private monitoring is possible. Theoretical models have shown that such desire can indeed sustain social norms, but empirical evidence is lacking. Moreover it is unclear whether this desire ranges over others' “empirical” or “normative” expectations. We propose a new experimental design to isolate this motivation and to investigate what kind of expectations people are inclined to meet. Results indicate that, when nobody can assign either material or immaterial sanctions, the perceived legitimacy of others' normative expectations can motivate a significant number of people to comply with costly social norms.

SSRN Electronic Journal, 2000

Excess entry refers to the high failure rate of new entrepreneurial ventures. Economic explanatio... more Excess entry refers to the high failure rate of new entrepreneurial ventures. Economic explanations suggest "hit and run" entrants and risk-seeking behavior. A psychological explanation is that people (entrepreneurs) are overconfident in their abilities .

∗ The authors' names are listed alphabetically. They thank Carlos Trujillo, Julian Rode, and... more ∗ The authors' names are listed alphabetically. They thank Carlos Trujillo, Julian Rode, and Enric Soria for help in conducting the experiments. They have also benefited from the helpful comments of Michele Bernasconi, Christian Garavaglia, Franco Malerba, Don Moore, ...

Journal of Economic Psychology, 2009

Studies have found that people are overconfident in estimation involving difficult tasks but unde... more Studies have found that people are overconfident in estimation involving difficult tasks but underconfident in easy tasks. Conversely, they are overconfident in placing themselves in easy tasks but underconfident in hard tasks. These findings can be explained by a regression hypothesis that implies random errors in estimation as well as by rational Bayesian updating (that implies no random error). We test these hypotheses in five experiments. We find overconfidence in estimation involving hard tasks but underconfidence in easy tasks. However, for placement (involving both easy and hard tasks) we find no overconfidence, regression effects due to low and high anchor points, and extreme underconfidence when people choose between multiple alternatives. On the other hand, when given precise information about absolute performance, people's re-assessments of relative performance are consistent with the Bayesian model. Since placement judgments are important in many competitive settings, our results emphasize the need for more research to identify their determinants.

The ability to comply with social norms is a feature that is unique to human cooperation. It has ... more The ability to comply with social norms is a feature that is unique to human cooperation. It has been suggested that norm compliance is motivated by a desire to meet others’ expectations. We present an experiment designed to disentangle two possible motivations to meet others’ expectations: guilt aversion and perceived legitimacy. According to the theory of guilt aversion it is sufficient to desire not to disappoint others’ payoff expectations; according to the latter motivation not all expectations matter but only those are perceived as legitimate. A promise is a powerful way to make a social norm salient and to make expectations on our behavior legitimate. We find evidence that supports the hypothesis that others' expectations on one's own behavior matter only when they are perceived as legitimate.

In this paper we introduce the “extortion game” and propose a set of experiments aimed at studyin... more In this paper we introduce the “extortion game” and propose a set of experiments aimed at studying both the extorter’s and the victim’s behavior. The primary focus of our experiments is understanding what determines both the extent of the extortive request and the victim’s reaction in terms of compliance. Our results show that the extorter’s requests are proportional to the victim’s earnings, similar across victims and positively correlated with the level of request the extorter perceives as “fair”. Punishment is rare and the extorted sums are rather small. Results also shed light on the motivations that make a victim compliant with extortive requests, confirming that punishment plays a role in promoting compliance, but also showing the importance of other concurrent factors like information about peers’ behavior and the perceived fairness of the request. Overall, our results indicate that fairness concerns matter even in a context of extra-legal taxation, shaping both extorters’ requests and victims’ compliance.

Creativity is a complex and multi-dimensional phenomenon with tremendous economics importance. Y... more Creativity is a complex and multi-dimensional phenomenon with tremendous economics importance. Yet, despite this importance, there is very little work on the topic in the economics literature. In this paper, we consider the effect of incentives on creativity. We present a first series of experiments on individual creativity where subjects face creativity tasks where, in one case, ex-ante goals and constraints are imposed on their answers, and in the other case no restrictions apply. The effects of financial incentives in stimulating creativity in both types of tasks is then tested, together with the impact of personal features like risk and ambiguity aversion. Our findings show that, in general, financial incentives affect “closed” (constrained) creativity, but do not facilitate “open” (unconstrained) creativity. However, in the latter case incentives do play a role for ambiguity-averse agents, who tend to be significantly less creative and seem to need extrinsic motivation to exert effort in a task whose odds of success they don’t know. The second set of experiments aims at exploring group creativity in contexts where corporate culture promotes cooperation or competition among group members. Our results show that, in the case of closed tasks, financial incentives and collectivist attitudes foster creativity, but only with cooperative corporate culture.

The paper presents the results of a lab-in-the-field experiment in three South African townships ... more The paper presents the results of a lab-in-the-field experiment in three South African townships located in the suburbs of Cape Town. The experimental design consists of a set of decisions on how the members of a naturally occurring group allocate an endowment to a private or to a public account. In our treatments, we first manipulate the degree of participation of group members in the choice of the public good, from involvement of the group leader only, to collective discussion and to private voting. Additionally, we explore the effectiveness of monetary incentives (collective versus individual) set in order to promote participation. The results show that leader guidance and participatory incentives significantly raise cooperation and hold after controlling for a wide set of individual and group characteristics.

We experimentally investigate a finitely repeated public goods game setting where, in each round,... more We experimentally investigate a finitely repeated public goods game setting where, in each round, access to sanctioning power is exclusively awarded to one single player per group. We show that our central ‘Top Contributors as Punishers’ institution – a mechanism by which a player needs to be the highest contributor in her group in order to earn the right to sanction others – is extremely effective in raising cooperation and welfare due to turnover in the top contributor role and to top contributors’ willingness to substantially sanction others. Our findings yield implications for the design of mechanisms intended to foster cooperation in social dilemma environments.

Are buyers willing to pay more for self-insurance coverage when the probabilities of loss are amb... more Are buyers willing to pay more for self-insurance coverage when the probabilities of loss are ambiguous? Is willingness to pay affected by the source of ambiguity? This paper addresses these main research questions. Ambiguity has multiple sources: it can derive from lack of information on the context where the decision-maker operates or can be a consequence of ignorance on her own characteristics or performance. After measuring subjects’ willingness to pay when losses are risky, we relate the probability to incur in losses both to events that are ‘external’ to the individual and to occurrences that regard the individual absolute performance in a task, i.e. to ‘internal’ sources of ambiguity.

In this paper we present a novel experimental procedure aimed at better understanding the interac... more In this paper we present a novel experimental procedure aimed at better understanding the interaction between confidence and ambiguity attitudes in individual decision making. Different ambiguity settings not only can be determined by the lack of information in possible scenarios completely “external” to the decision-maker, but also can be a consequence of the decision-maker’s ignorance about her own characteristics or performance and thus deals with confidence. We design a multistage experiment where subjects face different sources of ambiguity and where we are able to control for self-assessed levels of competence. By means of a Principal Component Analysis, we obtain a set of measures of “internal” and “external” ambiguity aversion. Our regressions show that the two measures are significantly correlated at the subject level, that subjects’ “internal” ambiguity aversion increases in performance in the high-competence task and that “external” ambiguity aversion moderately increases in earnings. Self-selection does not play any role.

In the framework of a finitely repeated public goods game with costly punishment options, we intr... more In the framework of a finitely repeated public goods game with costly punishment options, we introduce a novel restrictive setup where a principle of legitimacy holds, in the sense that only virtuous behavior (that is, being a high contributor) allows one to gain access to sanctioning opportunities (‘entitlement’) and only wrongful behavior (that is, being a low contributor) makes one a potential target of peer punishment (‘desert’). As a consequence, acting virtuously guarantees that it will not be possible to be punished by less virtuous subjects (‘immunity’). These restrictions, by allowing for ‘legitimate punishment’ only, rule out by construction so called antisocial punishment as well as vengeful behavior. Moreover, we manipulate the amount of information over others’ contributions that subjects receive before making their punishment decisions. Our preliminary results show that restrictions lead to an increase of cooperation levels and virtuous restrictions combined with detailed feedback on peers’ contribution significantly increase contribution levels and make cooperation sustainable over time.

Studies have found that people are overconfident in estimation involving difficult tasks but unde... more Studies have found that people are overconfident in estimation involving difficult tasks but underconfident in easy tasks. Conversely, they are overconfident in placing themselves in easy tasks but underconfident in hard tasks. These findings can be explained by a regression hypothesis that implies random errors in estimation as well as by rational Bayesian updating (that implies no random error). We test these hypotheses in five experiments.
We find overconfidence in estimation involving hard tasks but underconfidence in easy tasks. However, for placement (involving both easy and hard tasks) we find no overconfidence, regression effects due to low and high anchor points, and extreme underconfidence when people choose between multiple alternatives. On the other hand, when given precise information about absolute performance, people’s re-assessments of relative performance are consistent with the Bayesian model. Since placement judgments are important in many competitive settings, our results emphasize the need for more research to identify their determinants.

Empirical evidence about innovation is doubtful in showing incumbent firms’ and new entrants’ att... more Empirical evidence about innovation is doubtful in showing incumbent firms’ and new entrants’ attitude toward radical innovations. Moreover, theoretical works exhibit divergent conclusions when investigating the incentives to innovate. Our paper emphasizes the importance of distinguishing between degrees of innovativeness when comparing an incumbent’s and an entrant’s incentives to invest in innovation. The model captures the peculiarity of a radical innovation along three dimension: risk, impact on the existing market and capability of opening up a new market. The results emphasize the role of substitution and
complementarity between markets in determining the incentives to innovate in the radical case. Implications on innovation policy are finally discussed.

This article analyzes a firm's decision of entering a new market—or staying outside—and considers... more This article analyzes a firm's decision of entering a new market—or staying outside—and considers five decision models—optimizing, satisficing, incremental, cybernetic, and random—and their domain of applicability in order to discuss how fit they are in describing this specific decision. Because the cybernetic decision strategy appears to be the most appropriate to deal with the entry decision, the work goes deeper into this model focusing on the degree of uncertainty that the environment represents to the decision makers and to the state of the conflict of interest that arises because this decision implies a coordination problem.

LIUC Papers in Economics, Jan 1, 2008

The pervasiveness of the entrepreneurial phenomenon draws scholars’ attention to what determines ... more The pervasiveness of the entrepreneurial phenomenon draws scholars’ attention to what determines the decision to become an entrepreneur. Entrepreneurial decisions imply judgemental decisions. Different approaches in economics conceive such judgemental decisions as firm entry, or real investment in the creation of a new business, or making a career choice in favour of a particular type of self-employment. In this paper, the literature on entrepreneurs’ features, motives, and markets is enriched with theoretical and empirical results from industrial organization, financial economics, and labour economics.
.

Empirical evidence on stock prices shows that firms investing successfully in radical innovation ... more Empirical evidence on stock prices shows that firms investing successfully in radical innovation experience higher stock returns. This paper provides a model that sheds light on the relationship between the degree of firm innovativeness and stock returns, whose movements capture expectations on firm’s profitability and growth. The model grounds on the Neo-Schumpeterian growth models setup and relies on the crucial assumption of radical innovation characterized by “ambiguity” or Knightian uncertainty: due to its uniqueness and originality, no distribution of probability can be reasonably associated to radical innovation’ success or failure. Extreme (maxmin preferences) and smoother ambiguity aversion (alpha-maxmin, Choquet) are here compared. Results show that the assumption of ambiguity-aversion is critical in determining higher returns in presence of radical innovation and the specific definition of expected utility shapes the extent of the returns. Risk attitude plays no role.

Is culture an important variable to explain whether groups can successfully provide public goods?... more Is culture an important variable to explain whether groups can successfully provide public goods?
A wealth of empirical evidence on both industrialized and developing countries shows that cooperation levels decrease in the presence of ethnic divisions. Although several laboratory works deal with cultural differences, so far most studies restrict their attention to cross-cultural comparisons among internally homogeneous societies. We depart from these contributions and conduct an intercultural public goods game with punishment experiment in Italy, a country where immigration is a quite recent, but politically hot phenomenon. We investigate the effects of introducing a varying number of foreign participants within a homogeneous pool of native subjects.
Our results indicate that foreigners contribute significantly less than natives, natives react lowering their own contribution levels, and, consequently, the degree of cultural diversity negatively affects the overall level of cooperation. In terms of sanctioning, we observe no difference in the overall amount of assigned and received punishment points; however, behaving mostly as free-riders, foreigners are more likely to use anti-social punishment. In the absence of institutional restrictions ruling out anti-social punishment, this might amplify the documented detrimental effect on cooperation.