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Obligations and cooperative behaviour in public good games

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  • Galbiati, Roberto
  • Vertova, Pietro

Abstract

Laws express rules of conduct ('obligations') enforced by the means of penalties and rewards ('incentives'). The role of incentives in shaping individual behaviour has been largely analysed in the traditional economic literature. On the contrary, very little is known about the specific role of obligations. In this paper we test whether or not obligations have any independent effect on cooperation in a public good game. The results show that, for given marginal incentives, different levels of minimum contribution required by obligation determine significantly different levels of average contributions. Moreover, obligations per se cannot sustain cooperation over time, even if they affect the rate of decline of average contributions. Finally, unexpected changes in the minimum contribution have asymmetric dynamic effects on the levels of cooperation: a reduction does not alter the descending trend of cooperation, whereas an increase induces a temporary re-start in average contributions.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 64 (2008)
Issue (Month): 1 (September)
Pages: 146-170

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Handle: RePEc:eee:gamebe:v:64:y:2008:i:1:p:146-170

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Cooperation Incentives Obligations Laws Public good games;

References

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  1. Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
  2. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
  3. Falk, Armin & Fehr, Ernst & Zehnder, Christian, 2005. "The Behavioural Effects of Minimum Wages," CEPR Discussion Papers 5115, C.E.P.R. Discussion Papers.
  4. Ernst Fehr & Armin Falk, 2002. "Psychological Foundations of Incentives," CESifo Working Paper Series 714, CESifo Group Munich.
  5. Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
  6. Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
  7. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
  8. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
  9. Jean-Robert Tyran & Lars P. Feld, 2005. "Achieving Compliance when Legal Sanctions are Non-Deterrent," CREMA Working Paper Series 2005-17, Center for Research in Economics, Management and the Arts (CREMA).
  10. Cardenas, Juan Camilo & Stranlund, John & Willis, Cleve, 2000. "Local Environmental Control and Institutional Crowding-Out," World Development, Elsevier, vol. 28(10), pages 1719-1733, October.
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