Abstract: Sanctioning systems in social dilemmas are often discussed to increase trust in others and to increase cooperation. Yamagishi (1986a, 1986b, 1992) showed that people tended to favor the introduction of a sanctioning system when there was little trust that other people would cooperate. The trust positively relates to cooperation (De Cremer et al., 2001). This suggests a sanctioning system may increase cooperation by increasing trust in others. However, findings outside social dilemma research argued that a sanctioning system can decrease trust that others are internally motivated to cooperate (De Dreu et al, 1998). If a sanctioning system decreased trust in others, would the sanctioning negatively affect cooperation with others? Given this, this paper is to explore the relationship of sanction, trust and cooperation by “Removing the Sanction” paradigm and a measurement of social value orientation.
This paper examined the effects of a sanction on the trust and cooperation in public goods dilemma, including two experiments. In the first experiment, 76 participants were randomly assigned to the two conditions. The level of the trust and cooperation for the participants in the two conditions (sanction versus no-sanction) were compared after removing the sanction. 126 participants were measured by social value orientation, and 96 participants were chosen including 48 pro-socials and 48 individualists who were randomly assigned to three conditions including no sanction, mild sanction and severe sanction in the second experiment. After removing the mild sanction and severe sanction respectively, the paper compared the trust and cooperation of pro-socials with participants who had not gone through sanction. The same procedure had been done with individualists.
The main conclusions are as follows: participants who have experienced the presence of the sanction trust that another group member would cooperate less than participants who have not. The former cooperates less than the latter. The negative effect of the former presence of the sanction on cooperation is mediated by the trust in phase 2.
This study has important implications in the practice of organization management. In some organizations, when the trust in others is of initially high degree, a sanction installing can undermine this trust and consequently undermine cooperation after removing the sanction. When the degree of trust in others is initially low, it’s essential to install a sanction in order to increase cooperation with each other.

Key words: public goods dilemmas, sanction, trust, social value orientation, cooperation