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Secret Santa: Anonymity, Signaling, and Conditional Cooperation

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  • David Hugh-Jones

    (Max Planck Institute for Economics, Jena)

  • David Reinstein

    (Department of Economics, Essex University)

Abstract

Costly signaling of commitment to a group has been proposed as an explanation for participation in religion and ritual. But if the signal's cost is too small, freeriders will send the signal and behave selflshly later. Effective signaling may then be prohibitively costly. If the average level of signaling in a group is observable, but individual effort is not, then freeriders can behave selflshly without being detected, and group members will learn about the average level of commitment among the group. We develop a formal model, and give examples of institutions that enable anonymous signaling, including ritual, religion, music and dance, voting, charitable donations, and military institutions. We explore the value of anonymity in the laboratory with a repeated two-stage public goods game with exclusion. When first-stage contributions are anonymous, subjects are better at predicting second-stage behavior, and maintain a substantially higher level of cooperation.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-048.

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Date of creation: 02 Jul 2009
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Handle: RePEc:jrp:jrpwrp:2009-048

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Keywords: signaling; anonymity; public goods;

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Cited by:
  1. Patel, Amrish & Cartwright, Edward & Mark, Van Vugt, 2010. "Punishment Cannot Sustain Cooperation in a Public Good Game with Free-Rider Anonymity," Working Papers in Economics, University of Gothenburg, Department of Economics 451, University of Gothenburg, Department of Economics.

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