VisszaAbstract:
Coleman (1988) proposes that social structure is important to effectively internalize external effects. In a lab experiment we study whether social closure is sufficient to discipline subjects not to take money from others. Shareholder A chooses how much money to take from stakeholders B1 and B2. The stakeholders observe the amount taken. In the closure treatment stakeholders communicate with each other. In the noclosure treatment each stakeholder communicates with a bystander who is not affected by A's choice. After communication each stakeholders individually invests in punishing the shareholder. Punishment is costly. Our main result suggests that shareholders take more money from stakeholders in the closure treatment than in the noclosure treatment. This observation contradicts Coleman’s hypothesis. To test the robustness of our results we conduct a follow up experiment. We allow stakeholders to observe each other’s punishment choices. Furthermore, we look at the effect of decreased punishment costs.