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Evolutionary Norm Enforcement

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  • Werner Güth
  • Axel Ockenfels

Abstract

Applying an indirect evolutionary approach with endogenous preference formation, we show that a legal system can induce players to reward trust even if material incentives dictate to exploit trust. By analyzing the crowding out or crowding in of trustworthiness implied by various verdict rules, we can assess how a court influences the share of kept promises of "truly" trustworthy players who evolutionarily evolved as trustworthy and of opportunistic players who are only trustworthy if inspired by material incentives.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 331.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_331

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References

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  1. Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, American Economic Association, vol. 77(4), pages 593-604, September.
  2. Geoffrey Brennan & Werner Güth & Hartmut Kliemt, 2003. "Trust in the Shadow of the Courts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 159(1), pages 16-, March.
  3. Ockenfels, Axel & Selten, Reinhard, 2000. "An Experiment on the Hypothesis of Involuntary Truth-Signalling in Bargaining," Games and Economic Behavior, Elsevier, Elsevier, vol. 33(1), pages 90-116, October.
  4. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 36(1), pages 453-86, April.
  5. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, American Economic Association, vol. 85(3), pages 291-303, June.
  6. Guth, W. & Kliemt, H., 1993. "Competition or Co-Operation," Papers, Tilburg - Center for Economic Research 9339, Tilburg - Center for Economic Research.
  7. Iris Bohnet & Bruno S. Frey & Steffen Huck, . "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 052, Institute for Empirical Research in Economics - University of Zurich.
  8. Werner Güth & Hartmut Kliemt, 1994. "Competition Or Co-Operation: On The Evolutionary Economics Of Trust, Exploitation And Moral Attitudes," Metroeconomica, Wiley Blackwell, Wiley Blackwell, vol. 45(2), pages 155-187, 06.
  9. John C Harsanyi, 1997. "Games with incomplete information played by "bayesian" players," Levine's Working Paper Archive 1175, David K. Levine.
  10. Selten, Reinhard, 1983. "Evolutionary stability in extensive two-person games," Mathematical Social Sciences, Elsevier, Elsevier, vol. 5(3), pages 269-363, September.
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Citations

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Cited by:
  1. Croson, Rachel & Konow, James, 2007. "Double Standards: Social Preferences and Moral Biases," MPRA Paper 2729, University Library of Munich, Germany.
  2. Werner Güth & Axel Ockenfels, . "The Coevolution of Morality and Legal Institutions - An indirect evolutionary approach -," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2002-06, Max Planck Institute of Economics, Strategic Interaction Group.
  3. Gary E. Bolton & Axel Ockenfels, 2002. "A stress test of fairness measures in models of social utility," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2002-29, Max Planck Institute of Economics, Strategic Interaction Group.
  4. Axel Ockenfels, 2009. "Marktdesign und Experimentelle Wirtschaftsforschung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 10(s1), pages 31-53, 05.
  5. Friederike Mengel & Axel Ockenfels & Werner Güth, 2006. "The Dynamics of Trust and Trustworthiness on EBay. An Evolutionary Analysis of Buyer Insurance and Seller Reputation," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2006-03, Max Planck Institute of Economics, Strategic Interaction Group.
  6. Werner Güth & Axel Ockenfels, 2002. "The Coevolution of Trust and Institutions in Anonymous and Non-anonymous Communities," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2002-07, Max Planck Institute of Economics, Strategic Interaction Group.
  7. Werner Güth & Friederike Mengel & Axel Ockenfels, 2007. "An Evolutionary Analysis of Buyer Insurance and Seller Reputation in Online Markets," Theory and Decision, Springer, Springer, vol. 63(3), pages 265-282, November.
  8. Edward Castronova, . "Achievement Bias in the Evolution of Preferences," Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology, Berkeley Electronic Press 2-1-1010, Berkeley Electronic Press.
  9. Güth, Werner & Kliemt, Hartmut, 2001. "Langzeiteffekte der Theory of Games and Economic Behavior: Zur Anwendung der Spieltheorie in den (Sozial-)wissenschaften," SFB 373 Discussion Papers, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes 2001,8, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  10. Edward Castronova, 2004. "Achievement Bias in the Evolution of Preferences," Journal of Bioeconomics, Springer, Springer, vol. 6(2), pages 195-226, May.

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