Expressive Law: Framing or Equilibrium Selection?
AbstractLaw deters, educates, and coordinates. Economists typically focus on deterrence and sociologists often focus on education. Since deterrence causes marginal changes and education confronts relatively stable preferences, economists and sociologists may overlook lawâ€™s largest effects on behavior. We hypothesize that lawâ€™s largest effects come from coordination. Normative systems have multiple equilibria, so announcing a new law can change expectations and cause behavior to jump from one equilibrium to another. To demonstrate this possibility, we ran games with interdependent payoffs in which we simulated a law by telling experimental groups that choosing Left will result in a â€œpenaltyâ€ ten percent of the time. We set the penalty too small to change the equilibria among rationally self-interested actors, thus eliminating deterrence effects. First we ran a PD game in which the penalty does not affect the uniquely dominant strategy of each player. In these circumstances, any change in behavior caused by announcing the penalty must result from more people acting morally and renouncing self-interest. In fact, announcing the penalty did not change the number of moral actors. Next we repeated the experiment in a crowding game with a uniquely dominant strategy for each player and obtained the same results as in the PD game. Finally, we ran a coordination game with multiple equilibria. Announcing the penalty caused jumps in behavior from one equilibrium to another. The power of the penalty to coordinate increased as the proportion of actors decreased whose cooperation was needed to tip the system to a Pareto-superior equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Berkeley Olin Program in Law & Economics in its series Berkeley Olin Program in Law & Economics, Working Paper Series with number qt5h6970h8.
Date of creation: 09 Mar 2001
Date of revision:
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sonnemans, Joep & Schram, Arthur & Offerman, Theo, 1998. "Public good provision and public bad prevention: The effect of framing," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 143-161, January.
- Iris Bohnet & Bruno S. Frey & Steffen Huck, . "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," IEW - Working Papers 052, Institute for Empirical Research in Economics - University of Zurich.
- Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
- Brandts Jordi & Macleod W. Bentley, 1995.
"Equilibrium Selection in Experimental Games with Recommended Play,"
Games and Economic Behavior,
Elsevier, vol. 11(1), pages 36-63, October.
- Macleod, B. & Brandts, J., 1992. "Equilibrium Selection in Experimental Games with Recommended Play," UFAE and IAE Working Papers 164.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
- Cooper, Russell, et al, 1990. "Selection Criteria in Coordination Games: Some Experimental Results," American Economic Review, American Economic Association, vol. 80(1), pages 218-33, March.
- Park, Eun-Soo, 2000. "Warm-glow versus cold-prickle: a further experimental study of framing effects on free-riding," Journal of Economic Behavior & Organization, Elsevier, vol. 43(4), pages 405-421, December.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Andreoni, J. & Erard, B. & Feinstein, J., 1996.
9610r, Wisconsin Madison - Social Systems.
- Gary Charness, 1998.
"Pre-play communication and credibility: A test of Aumann's conjecture,"
Economics Working Papers
293, Department of Economics and Business, Universitat Pompeu Fabra.
- Charness, Gary B, 1998. "Pre-Play Communications And Credibility: A Test Of Aumann'S Conjecture," University of California at Santa Barbara, Economics Working Paper Series qt01j786tj, Department of Economics, UC Santa Barbara.
- Sheffrin, S.M. & Triest, R.K., 1991. "Can Brute Deterrence Backfire? Perceptions and Attitudes in Taxpayer Compliance," Papers 373, California Davis - Institute of Governmental Affairs.
- George A. Akerlof, 1978.
"A theory of social custom, of which unemployment may be one consequence,"
Special Studies Papers
118, Board of Governors of the Federal Reserve System (U.S.).
- Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 749-75, June.
- Cooter, Robert, 2000. "Do Good Laws Make Good Citizens? An Economic Analysis of Internalizing Legal Values," Berkeley Olin Program in Law & Economics, Working Paper Series qt3xr1v1x2, Berkeley Olin Program in Law & Economics.
- John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
- Hay, Jonathan R & Shleifer, Andrei, 1998. "Private Enforcement of Public Laws: A Theory of Legal Reform," American Economic Review, American Economic Association, vol. 88(2), pages 398-403, May.
- Edward L. Glaeser & Spence Glendon, 1998.
"Who Owns Guns? Criminals, Victims and the Culture of Violence,"
Harvard Institute of Economic Research Working Papers
1822, Harvard - Institute of Economic Research.
- Glaeser, Edward L & Glendon, Spencer, 1998. "Who Owns Guns? Criminals, Victims, and the Culture of Violence," American Economic Review, American Economic Association, vol. 88(2), pages 458-62, May.
- James Andreoni, 1997.
"Warm-glow versus cold-prickle: the effect of positive and negative framing on cooperation in experiments,"
Levine's Working Paper Archive
671, David K. Levine.
- Andreoni, James, 1995. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 1-21, February.
- James Andreoni, 1994. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," Experimental 9410002, EconWPA.
- KOHLBERG, Elon & MERTENS, Jean-François, .
"On the strategic stability of equilibria,"
CORE Discussion Papers RP
-716, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gordon, James P. P., 1989. "Individual morality and reputation costs as deterrents to tax evasion," European Economic Review, Elsevier, vol. 33(4), pages 797-805, April.
- Gneezy, U. & Rustichini, A., 1998.
"Pay Enough - Or Don't Pay at All,"
1998-57, Tilburg University, Center for Economic Research.
- repec:att:wimass:9406 is not listed on IDEAS
- Valley, Kathleen L. & Moag, Joseph & Bazerman, Max H., 1998. "'A matter of trust':: Effects of communication on the efficiency and distribution of outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 211-238, February.
- Bohnet, Iris & Frey, Bruno S., 1999. "The sound of silence in prisoner's dilemma and dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 43-57, January.
- Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
- Cachon, Gerard P & Camerer, Colin F, 1996. "Loss-Avoidance and Forward Induction in Experimental Coordination Games," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 165-94, February.
- Lars P. Feld & Jean-Robert Tyran, 2002. "Why People Obey the Law: Experimental Evidence from the Provision of Public Goods," CESifo Working Paper Series 651, CESifo Group Munich.
- Radner, Roy & Schotter, Andrew, 1989. "The sealed-bid mechanism: An experimental study," Journal of Economic Theory, Elsevier, vol. 48(1), pages 179-220, June.
- Tom Ross & Russell Cooper & Douglas V. DeJong & Robert Forsythe, 1987. "Selection Criteria in Coordination Games: Some Experimental Results," Carleton Industrial Organization Research Unit (CIORU) 87-04, Carleton University, Department of Economics.
- R. Cookson, 2000. "Framing Effects in Public Goods Experiments," Experimental Economics, Springer, vol. 3(1), pages 55-79, June.
- Van Huyck, John B. & Gillette, Ann B. & Battalio, Raymond C., 1992. "Credible assignments in coordination games," Games and Economic Behavior, Elsevier, vol. 4(4), pages 606-626, October.
- Frohlich, Norman & Oppenheimer, Joe, 1998. "Some consequences of e-mail vs. face-to-face communication in experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 389-403, April.
- COOPER, R. & DEJONG, D.V. & FORSYTHE, R. & Tom Ross, 1989. "Communication In Coordination Games," Carleton Industrial Organization Research Unit (CIORU) 89-07, Carleton University, Department of Economics.
- Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
- Cooper, Russell, et al, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 739-71, May.
- Bruno S. Frey & Susanne Neckermann, 2005.
"Auszeichnungen: ein vernachlÃ¤ssigter Anreiz,"
CREMA Working Paper Series
2005-14, Center for Research in Economics, Management and the Arts (CREMA).
- Ernst Fehr & Armin Falk, .
"Psychological Foundations of Incentives,"
IEW - Working Papers
095, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr & Armin Falk, 2002. "Psychological Foundations of Incentives," CESifo Working Paper Series 714, CESifo Group Munich.
- Ernst Fehr, 2003. "Psychological Foundations of Incentives," Microeconomics 0305010, EconWPA.
- Fehr, Ernst & Falk, Armin, 2002. "Psychological Foundations of Incentives," IZA Discussion Papers 507, Institute for the Study of Labor (IZA).
- Falk, Armin & Fehr, Ernst, 2002. "Psychological Foundations of Incentives," CEPR Discussion Papers 3185, C.E.P.R. Discussion Papers.
- Ellingsen, Tore & Johannesson, Magnus & Mollerstrom, Johanna & Munkhammar, Sara, 2012. "Social framing effects: Preferences or beliefs?," Games and Economic Behavior, Elsevier, vol. 76(1), pages 117-130.
- Carbonara, Emanuela & Parisi, Francesco & von Wangenheim, Georg, 2012. "Unjust laws and illegal norms," International Review of Law and Economics, Elsevier, vol. 32(3), pages 285-299.
- Christoph Engel & Michael Kurschilgen, 2011. "The Coevolution of Behavior and Normative Expectations. Customary Law in the Lab," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2011_32, Max Planck Institute for Research on Collective Goods.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.