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Institutions influence preferences: Evidence from a common pool resource experiment

  • Rodriguez-Sickert, Carlos
  • Guzmán, Ricardo Andrés
  • Cárdenas, Juan Camilo

We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting our model to experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion. Low fines stabilize cooperation by preventing a spiral of negative reciprocation.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 67 (2008)
Issue (Month): 1 (July)
Pages: 215-227

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Handle: RePEc:eee:jeborg:v:67:y:2008:i:1:p:215-227
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. Andreoni, James, 1995. "Cooperation in Public-Goods Experiments: Kindness or Confusion?," American Economic Review, American Economic Association, vol. 85(4), pages 891-904, September.
  2. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
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  9. Aldo Rustichini & Uri Gneezy, 2000. "A fine is a price," Natural Field Experiments 00258, The Field Experiments Website.
  10. Samuel Bowles & Herbert Gintis, 2002. "Social Capital and Community Governance," Economic Journal, Royal Economic Society, vol. 112(483), pages 419-436, November.
  11. Lin, Chung-cheng & Yang, C.C., 2006. "Fine enough or don't fine at all," Journal of Economic Behavior & Organization, Elsevier, vol. 59(2), pages 195-213, February.
  12. Samuel Bowles, 2007. "Social Preferences and Public Economics: Are good laws a substitute for good citizens?," Department of Economics University of Siena 496, Department of Economics, University of Siena.
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