Trabajo publicado como artículo en Journal of Economic Behavior and Organization 72(3): 823-834 (2009).-- http://dx.doi.org/10.1016/j.jebo.2009.08.001The existence of punishment opportunities has been shown to cause efficiency in public goods experiments to increase considerably. In this paper we ask whether punishment also has a downside in terms of process dissatisfaction. We conduct an experiment to study the conjecture that an environment with stronger punishment possibilities leads to higher material but lower subjective well-being. The more general motivation for our study stems from the notion that people's subjective well-being may be affected by the institutional environment they find themselves in. Our findings show that harsher punishment possibilities lead to signficantly higher well-being, controlling for earnings and other relevant variables. People derive independent satisfaction from interacting under the protection of strong punishment possibilities. These results complement the evidence on the neural basis of altruistic punishment reported in de Quervain et al. (2004).The authors thank the Spanish Ministry of Education and Science and the Barcelona Economics program of CREA for financial support.