Constructing Social Division to Support Cooperation: Theory and Evidence from Nepal
AbstractMany societies are divided into multiple smaller groups. The defining feature of these groups is that certain kinds of interaction are more likely to take place within a group than across groups. I build a model in which group divisions are enforced through a reputational penalty for interacting with members of different groups. Agents who interact with members of different groups find that they can support lower levels of cooperation in the future. The model explains why agents may be punished by the other members of their group for interacting with members of different groups and why agents are punished for interacting with members of some groups but not others. I test the empirical implication that there should be less cooperation among members of groups that make up a larger percentage of their communities. I discuss the origin and possible future of social division. JEL classification: Cooperation ; Caste ; Social Institution JEL codes: C7 ; O12 ; O17
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Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 1011.
Date of creation: 2013
Date of revision:
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-24 (All new papers)
- NEP-CDM-2013-09-24 (Collective Decision-Making)
- NEP-EVO-2013-09-24 (Evolutionary Economics)
- NEP-GTH-2013-09-24 (Game Theory)
- NEP-SOC-2013-09-24 (Social Norms & Social Capital)
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