Punish the perpetrator or compensate the victim? Gain vs. Loss context modulate third-party altruistic behaviors

Third-party punishment and third-party compensation are primary responses to observed norms violations. Previous studies mostly investigated these behaviors in gain rather than loss context, and few study made direct comparison between these two behaviors. We conducted three experiments to investigate third-party punishment and third-party compensation in the gain and loss context. Participants observed two persons playing Dictator Game to share an amount of gain or loss, and the proposer would propose unfair distribution sometimes. In Study 1A, participants should decide whether they wanted to punish proposer. In Study 1B, participants decided to compensate the recipient or to do nothing. This two experiments explored how gain and loss contexts might affect the willingness to altruistically punish a perpetrator, or to compensate a victim of unfairness. Results suggested that both third-party punishment and compensation were stronger in the loss context. Study 2 directly compare third-party punishment and third-party compensation in the both contexts, by allowing participants choosing between punishment, compensation and keeping. Participants chose compensation more often than punishment in the loss context, and chose more punishments in the gain context. Empathic concern partly explained between-context differences of altruistic compensation and punishment. Our findings provide insights on modulating effect of context on third-party altruistic decisions.