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Evolutionary Norm Enforcement

  • Werner Gueth
  • Axel Ockenfels

Applying an indirect evolutionary approach with endogenous preference formation, we show that a legal system can induce players to reward trust even if material incentives dictate to exploit trust. By analyzing the crowding out or crowding in of trustworthiness implied by various verdict rules, we can assess how a court influences the share of kept promises of 'truly' trustworthy players who evolutionarily evolved as trustworthy and of opportunistic players woh are only trustworthy if inspired by material incentives.

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Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 156 (2000)
Issue (Month): 2 (June)
Pages: 335-

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200006)156:2_335:ene_2.0.tx_2-u
Contact details of provider: Web page: http://www.mohr.de/jite

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References listed on IDEAS
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  1. Werner Güth & Hartmut Kliemt, 1994. "Competition Or Co-Operation: On The Evolutionary Economics Of Trust, Exploitation And Moral Attitudes," Metroeconomica, Wiley Blackwell, vol. 45(2), pages 155-187, 06.
  2. repec:dgr:kubcen:199789 is not listed on IDEAS
  3. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
  4. Selten, Reinhard, 1983. "Evolutionary stability in extensive two-person games," Mathematical Social Sciences, Elsevier, vol. 5(3), pages 269-363, September.
  5. Brennan, G. & Güth, W. & Kliemt, H., 1997. "Trust in the Shadow of the Courts," Discussion Paper 1997-89, Tilburg University, Center for Economic Research.
  6. Guth, W. & Kliemt, H., 1993. "Competition or Co-Operation," Papers 9339, Tilburg - Center for Economic Research.
  7. Iris Bohnet & Bruno S. Frey & Steffen Huck, . "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," IEW - Working Papers 052, Institute for Empirical Research in Economics - University of Zurich.
  8. Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, vol. 77(4), pages 593-604, September.
  9. Ockenfels, Axel & Selten, Reinhard, 2000. "An Experiment on the Hypothesis of Involuntary Truth-Signalling in Bargaining," Games and Economic Behavior, Elsevier, vol. 33(1), pages 90-116, October.
  10. John C Harsanyi, 1997. "Games with incomplete information played by "bayesian" players," Levine's Working Paper Archive 1175, David K. Levine.
  11. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-86, April.
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