A comparison of coefficients in the two conditions shows that Dneg had a stronger impact in the SP condition. To assess whether this difference was significant, we ran a regression with the data from both conditions (see column three in Table 3). We added a dummy for the TP condition in this regression, and interacted this dummy with Dneg and Dpos. The regression shows that the TP dummy is insignificant, suggesting that the punishment level was not significantly different across conditions at the egalitarian transfer. The coefficient for the interaction term DnegTP Dummy is significantly negative, however, indicating that punishment was less severe in the TP condition for transfer levels below 50.

QUESTION: Why does audience presence blunt punishment for below-egalitarian transfers? Could be reputational concerns, diffusion of responsibility, or strategic restraint.

Ernst Fehr, Third-Party Punishment and …, loc. 90