We introduce, in particular, a third party into the dictator game (DG) and the prisoners' dilemma (PD) game. The third party observes the actions of the players in the DG and the PD and can then punish them. Punishment is, however, costly for the third party so a selfish third party will never punish. This design is motivated by the idea that social norms apply in both games: a norm concerning distributional fairness in the DG and a cooperation norm in the PD. The notion of strong reciprocity (Fehr & Fischbacher, 2003; Fehr, Fischbacher, & Ga¨chter, 2002; Gintis, Bowles, Boyd, & Fehr, 2003) implies that the third parties should be willing to punish the violation of these norms. Thus, if we observe punishment of norm violations, we have evidence that strong reciprocity is also relevant for behavior of third parties.

DEFINE: Illustrates strong reciprocity, where third parties punish norm violations despite personal cost. Builds on: "Unaffected bystanders punish norm violators even without personal stakes"

Ernst Fehr, Third-Party Punishment and …, loc. 13