Three studies are used to examine how surveillance and sanctioning systems
affect cooperative behavior in dilemma situations. The first two studies de
monstrate that a weak sanctioning system results in less cooperation than n
o sanctioning system; furthermore, results from the second study suggest th
at sanctions affect the type of decision people perceive they are making, p
rompting them to see it as a business rather than an ethical decision. The
results from these studies are used to develop a theoretical model that pos
tulates that the relationship between sanctions and cooperation is due to b
oth a signaling effect, in which sanctions influence the type of decision t
hat is perceived to be made, and a processing effect, in which the decision
processing, including whether or not the strength of the sanction is consi
dered, depends on the decision frame evoked. A third study provides support
for the processing-effect hypothesis.