Receivers' responses are integrated into costly third-party punishment in a way that interacts with the unfairness of allocations.

Costly third-party punishment (TPP) is an effective way to enforce fairness norms and promote cooperation. Recent studies have shown that the third party considers not only the proposer's suggested allocation but also the receiver's response to the allocation, which was typically ignored in traditional TPP studies when making punishment decisions. However, it remains unclear whether and how the varying unfair allocations and receivers' responses are integrated into third-party punishment. The current study addressed these issues at behavioral and electrophysiological levels by employing a modified third-party punishment task involving proposers' highly or moderately unfair allocations and the receivers' acceptance or rejection responses. At the behavioral level, participants punished proposers more often when receivers rejected relative to accepted unfair allocations. This effect was further modulated by the unfairness degree of allocations, indicated by a more pronounced rejection-sensitive effect when participants observed the moderately unfair offers. Electrophysiologically, when the receiver rejected the moderately unfair allocations, a stronger late-stage component P300/LPP, which was considered to be involved in allocations of attention resources, was found. Meanwhile, separated from the P300/LPP, the P200 associated with early attention capture demonstrated a rejection-sensitive effect. Together, in the costly TPP studies, the receiver is typically designated as passive and silent, and her/his responses to unfairness are conventionally ignored. However, our results indicate that except for the proposer's distribution behavior, the receiver's response does have an impact on third-party punishment in a way that interacts with the unfairness of allocations.