Norm Compliance and Strong Reciprocity

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Norm Compliance and Strong Reciprocity

Author Info

Rajiv Sethi
E. Somanathan

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Abstract

Strong reciprocity refers to the willingness to sacrifice one's own material self-interest to punish others for opportunistic actions. This propensity provides a decentralized mechanism for the enforcement of social norms, but its extent and persistence poses a theoretical puzzle. Since opportunistic individuals choose optimally to comply with or violate norms based on the likelihood and severity of sanctioning they anticipate, such individuals will always outperform reciprocators within any group. The presence of reciprocators in a group can, however, alter the behavior of opportunists in such a manner as to benefit all members of the group (including reciprocators). We show that under these circumstances, reciprocators can invade a population of opportunists when groups dissolve and are formed anew according to a process of purely random (non-assortative) matching. Furthermore, even when these conditions are not satisfied (so that an opportunistic population is stable) there may exist additional stable population states in which reciprocators are present.

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Paper provided by Santa Fe Institute in its series Working Papers with number 01-09-048.

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Date of creation: Sep 2001
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Handle: RePEc:wop:safiwp:01-09-048

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Paper
- Rajiv Sethi & E. Somanathan, 2002. "Norm compliance and strong reciprocity," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 02-03, Indian Statistical Institute, New Delhi, India. [Downloadable!]

This paper has been announced in the following NEP Reports:

NEP-ALL-2001-10-16 (All new papers)
NEP-EVO-2001-10-16 (Evolutionary Economics)

References listed on IDEAS
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