The effects of induced emotions on punishment and reward

The ability to punish free-riders has been shown to sustain cooperation in social dilemma games. Those that engage in costly punishment are often those that are angry at observed contributions of their fellow group members. This paper abstracts from the effect of integral (i.e., related to the situation) emotions and explicitly studies the effect of incidental (i.e., unrelated to the situation) emotions. By inducing either positive or negative emotions we can causally investigate the effect of negative emotions on punishment or reward decisions in a one-shot public good game where personal and social interests are at odds. Our findings suggest that neither punishment nor reward per se are a function of induced (incidental) emotions. Induced emotions also do not have an effect on the probability to punish or reward. However, we find that conditionally on punishing, subjects that are induced to be in a negative mood punish group members significantly harsher than subjects who are induced to be in a positive mood. The handing out of rewards is not affected by induced moods.