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Cooperation among Strangers under the Shadow of the Future

  • Gabriele Camera
  • Marco Casari

We study the emergence of norms of cooperation in experimental economies populated by strangers interacting indefinitely. Can these economies achieve full efficiency even without formal enforcement institutions? Which institutions for monitoring and enforcement facilitate cooperation? Finally, what classes of strategies do subjects employ? We find that, first, cooperation can be sustained even in anonymous settings; second, some type of monitoring and punishment institutions significantly promote cooperation; and, third, subjects mostly employ strategies that are selective in punishment. (JEL C71, C73, D12, Z13)

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 99 (2009)
Issue (Month): 3 (June)
Pages: 979-1005

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Handle: RePEc:aea:aecrev:v:99:y:2009:i:3:p:979-1005
Note: DOI: 10.1257/aer.99.3.979
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  1. Stefan Krasa & Anne P. Villamil, 2000. "Optimal Contracts when Enforcement Is a Decision Variable," Econometrica, Econometric Society, vol. 68(1), pages 119-134, January.
  2. Marco Casari & Luigi Luini, 2005. "Group Cooperation Under Alternative Peer Punishment Technologies: An Experiment," Labsi Experimental Economics Laboratory University of Siena 002, University of Siena.
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