Institutions influence preferences: Evidence from a common pool resource experiment
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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Volume (Year): 67 (2008)
Issue (Month): 1 (July)
Pages: 215-227
| 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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