IDEAS home Printed from https://ideas.repec.org/p/cdl/oplwec/qt5h6970h8.html
   My bibliography  Save this paper

Expressive Law: Framing or Equilibrium Selection?

Author

Listed:
  • Bohnet, Iris
  • Cooter, Robert

Abstract

Law deters, educates, and coordinates. Economists typically focus on deterrence and sociologists often focus on education. Since deterrence causes marginal changes and education confronts relatively stable preferences, economists and sociologists may overlook law’s largest effects on behavior. We hypothesize that law’s largest effects come from coordination. Normative systems have multiple equilibria, so announcing a new law can change expectations and cause behavior to jump from one equilibrium to another. To demonstrate this possibility, we ran games with interdependent payoffs in which we simulated a law by telling experimental groups that choosing Left will result in a “penalty” ten percent of the time. We set the penalty too small to change the equilibria among rationally self-interested actors, thus eliminating deterrence effects. First we ran a PD game in which the penalty does not affect the uniquely dominant strategy of each player. In these circumstances, any change in behavior caused by announcing the penalty must result from more people acting morally and renouncing self-interest. In fact, announcing the penalty did not change the number of moral actors. Next we repeated the experiment in a crowding game with a uniquely dominant strategy for each player and obtained the same results as in the PD game. Finally, we ran a coordination game with multiple equilibria. Announcing the penalty caused jumps in behavior from one equilibrium to another. The power of the penalty to coordinate increased as the proportion of actors decreased whose cooperation was needed to tip the system to a Pareto-superior equilibrium.

Suggested Citation

  • Bohnet, Iris & Cooter, Robert, 2001. "Expressive Law: Framing or Equilibrium Selection?," Berkeley Olin Program in Law & Economics, Working Paper Series qt5h6970h8, Berkeley Olin Program in Law & Economics.
  • Handle: RePEc:cdl:oplwec:qt5h6970h8
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/5h6970h8.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Radner, Roy & Schotter, Andrew, 1989. "The sealed-bid mechanism: An experimental study," Journal of Economic Theory, Elsevier, vol. 48(1), pages 179-220, June.
    2. Lars P. Feld & Jean-Robert Tyran, 2002. "Why People Obey the Law: Experimental Evidence from the Provision of Public Goods," CESifo Working Paper Series 651, CESifo.
    3. James Andreoni, 1995. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 1-21.
    4. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
    5. Brandts Jordi & Macleod W. Bentley, 1995. "Equilibrium Selection in Experimental Games with Recommended Play," Games and Economic Behavior, Elsevier, vol. 11(1), pages 36-63, October.
    6. Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
    7. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 791-810.
    8. Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
    9. Gordon, James P. P., 1989. "Individual morality and reputation costs as deterrents to tax evasion," European Economic Review, Elsevier, vol. 33(4), pages 797-805, April.
    10. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    11. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-248, March.
    12. Cooper, Russell, et al, 1990. "Selection Criteria in Coordination Games: Some Experimental Results," American Economic Review, American Economic Association, vol. 80(1), pages 218-233, March.
    13. Ernst Fehr & Klaus M. Schmidt, "undated". "Theories of Fairness and Reciprocity - Evidence and Economic Applications," IEW - Working Papers 075, Institute for Empirical Research in Economics - University of Zurich.
    14. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    15. Gary Charness, 1998. "Pre-play communication and credibility: A test of Aumann's conjecture," Economics Working Papers 293, Department of Economics and Business, Universitat Pompeu Fabra.
    16. Robert Cooter, 1998. "Expressive Law and Economics," CESifo Working Paper Series 161, CESifo.
    17. Russell Cooper & Douglas V. DeJong & Robert Forsythe & Thomas W. Ross, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 739-771.
    18. David Sally, 1995. "Conversation and Cooperation in Social Dilemmas," Rationality and Society, , vol. 7(1), pages 58-92, January.
    19. Frohlich, Norman & Oppenheimer, Joe, 1998. "Some consequences of e-mail vs. face-to-face communication in experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 389-403, April.
    20. Valley, Kathleen L. & Moag, Joseph & Bazerman, Max H., 1998. "'A matter of trust':: Effects of communication on the efficiency and distribution of outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 211-238, February.
    21. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    22. Ernst Fehr & Simon Gaechter, "undated". "Do Incentive Contracts Crowd out Voluntary Cooperation?," IEW - Working Papers 034, Institute for Empirical Research in Economics - University of Zurich.
    23. Cooter, Robert, 2000. "Do Good Laws Make Good Citizens? An Economic Analysis of Internalizing Legal Values," Berkeley Olin Program in Law & Economics, Working Paper Series qt3xr1v1x2, Berkeley Olin Program in Law & Economics.
    24. Bohnet, Iris & Frey, Bruno S. & Huck, Steffen, 2001. "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," American Political Science Review, Cambridge University Press, vol. 95(1), pages 131-144, March.
    25. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
    26. Van Huyck, John B. & Gillette, Ann B. & Battalio, Raymond C., 1992. "Credible assignments in coordination games," Games and Economic Behavior, Elsevier, vol. 4(4), pages 606-626, October.
    27. Hay, Jonathan R & Shleifer, Andrei, 1998. "Private Enforcement of Public Laws: A Theory of Legal Reform," American Economic Review, American Economic Association, vol. 88(2), pages 398-403, May.
    28. Glaeser, Edward L & Glendon, Spencer, 1998. "Who Owns Guns? Criminals, Victims, and the Culture of Violence," American Economic Review, American Economic Association, vol. 88(2), pages 458-462, May.
    29. R. Cookson, 2000. "Framing Effects in Public Goods Experiments," Experimental Economics, Springer;Economic Science Association, vol. 3(1), pages 55-79, June.
    30. Sonnemans, Joep & Schram, Arthur & Offerman, Theo, 1998. "Public good provision and public bad prevention: The effect of framing," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 143-161, January.
    31. Park, Eun-Soo, 2000. "Warm-glow versus cold-prickle: a further experimental study of framing effects on free-riding," Journal of Economic Behavior & Organization, Elsevier, vol. 43(4), pages 405-421, December.
    32. Posner, Richard A, 1998. "Social Norms, Social Meaning, and Economic Analysis of Law: A Comment," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 553-565, June.
    33. Gérard P. Cachon & Colin F. Camerer, 1996. "Loss-Avoidance and Forward Induction in Experimental Coordination Games," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 165-194.
    34. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity," Discussion Papers in Economics 14, University of Munich, Department of Economics.
    35. Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
    36. Bohnet, Iris & Frey, Bruno S., 1999. "The sound of silence in prisoner's dilemma and dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 43-57, January.
    37. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    38. Sheffrin, S.M. & Triest, R.K., 1991. "Can Brute Deterrence Backfire? Perceptions and Attitudes in Taxpayer Compliance," Papers 373, California Davis - Institute of Governmental Affairs.
    39. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    40. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-1037, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    2. Jean‐Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non‐deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, March.
    3. Galbiati, Roberto & Schlag, Karl H. & van der Weele, Joël J., 2013. "Sanctions that signal: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 34-51.
    4. Ellingsen, Tore & Johannesson, Magnus & Mollerstrom, Johanna & Munkhammar, Sara, 2012. "Social framing effects: Preferences or beliefs?," Games and Economic Behavior, Elsevier, vol. 76(1), pages 117-130.
    5. Romaniuc Rustam, 2016. "What Makes Law to Change Behavior? An Experimental Study," Review of Law & Economics, De Gruyter, vol. 12(2), pages 447-475, July.
    6. Richard McAdams & Janice Nadler, "undated". "A Third Model of Legal Compliance: Testing for Expressive Effects in a Hawk/Dove Game," Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy Working Paper Series yale_lepp-1029, Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy.
    7. Bruno S. Frey & Susanne Neckermann, 2005. "Auszeichnungen: Ein Vernachl�ssigter Anreiz," IEW - Working Papers 254, Institute for Empirical Research in Economics - University of Zurich.
    8. Sun, Huojun & Bigoni, Maria, 2018. "A fine rule from a brutish world? An experiment on endogenous punishment institution and trust," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 158-169.
    9. Niels Petersen, 2009. "Rational Choice or Deliberation? Customary International Law between Coordination and Constitutionalization," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(1), pages 71-85, March.
    10. Carbonara Emanuela & Parisi Francesco & von Wangenheim Georg, 2008. "Lawmakers as Norm Entrepreneurs," Review of Law & Economics, De Gruyter, vol. 4(3), pages 779-799, December.
    11. Fluet, Claude & Galbiati, Rpbertp, 2016. "Lois et normes : les enseignements de l'économie comportementale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 191-215, Mars-Juin.
    12. Daniel Arce & Sneha Bakshi & Rachel Croson & Catherine Eckel & Enrique Fatas & Malcolm Kass, 2011. "Counterterrorism strategies in the lab," Public Choice, Springer, vol. 149(3), pages 465-478, December.
    13. Galbiati, Roberto & Schlag, Karl H. & van der Weele, Joël J., 2013. "Sanctions that signal: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 34-51.
    14. Bruno S. Frey & Susanne Neckermann, 2006. "Auszeichnungen: Ein vernachlässigter Anreiz," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 271-284, May.
    15. repec:hal:spmain:info:hdl:2441/7o52iohb7k6srk09o0ks2e12i is not listed on IDEAS
    16. Leonard Hoeft & Michael Kurschilgen & Wladislaw Mill & Simone Vannuccini, 2022. "Norms as Obligations," Munich Papers in Political Economy 22, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.
    17. Carbonara, Emanuela & Parisi, Francesco & von Wangenheim, Georg, 2012. "Unjust laws and illegal norms," International Review of Law and Economics, Elsevier, vol. 32(3), pages 285-299.
    18. Christoph Engel & Michael Kurschilgen, 2011. "The Coevolution of Behavior and Normative Expectations. Customary Law in the Lab," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_32, Max Planck Institute for Research on Collective Goods.
    19. van der Weele Joël, 2012. "Beyond the State of Nature: Introducing Social Interactions in the Economic Model of Crime," Review of Law & Economics, De Gruyter, vol. 8(2), pages 401-432, October.
    20. Renate Buijze & Christoph Engel & Sigrid Hemels, 2015. "Insuring Your Donation – An Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_16, Max Planck Institute for Research on Collective Goods, revised Jul 2016.
    21. Richard H. McAdams & Janice Nadler, 2005. "Testing the Focal Point Theory of Legal Compliance: The Effect of Third‐Party Expression in an Experimental Hawk/Dove Game," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 2(1), pages 87-123, March.
    22. Licht Amir N., 2008. "Social Norms and the Law: Why Peoples Obey the Law," Review of Law & Economics, De Gruyter, vol. 4(3), pages 715-750, December.
    23. Roberto Galbiati & Karl Schlag & Joël van der Weele, 2009. "Can sanctions induce pessimism? An experiment," Economics Working Papers 1150, Department of Economics and Business, Universitat Pompeu Fabra.
    24. Richard H. McAdams, 2011. "The Focal Point Theory of Expressive Law," Chapters, in: Francesco Parisi (ed.), Production of Legal Rules, chapter 10, Edward Elgar Publishing.
    25. Kaushik Basu, 2016. "Beyond the Invisible Hand: Groundwork for a New Economics," Economics Books, Princeton University Press, edition 1, number 9299.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    2. Jean‐Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non‐deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, March.
    3. Richard H. McAdams & Janice Nadler, 2005. "Testing the Focal Point Theory of Legal Compliance: The Effect of Third‐Party Expression in an Experimental Hawk/Dove Game," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 2(1), pages 87-123, March.
    4. Brosig, Jeannette, 2006. "Communication channels and induced behavior," MPRA Paper 14035, University Library of Munich, Germany.
    5. Richard McAdams & Janice Nadler, "undated". "A Third Model of Legal Compliance: Testing for Expressive Effects in a Hawk/Dove Game," Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy Working Paper Series yale_lepp-1029, Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy.
    6. Fluet, Claude & Galbiati, Rpbertp, 2016. "Lois et normes : les enseignements de l'économie comportementale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 191-215, Mars-Juin.
    7. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
    8. Poulsen, Odile & Saral, Krista J., 2018. "Coordination and focality under gain–loss framing: Experimental evidence," Economics Letters, Elsevier, vol. 164(C), pages 75-78.
    9. Jia Liu & Yohanes E. Riyanto, 2017. "Information transparency and equilibrium selection in coordination games: an experimental study," Theory and Decision, Springer, vol. 82(3), pages 415-433, March.
    10. Konstantinos Georgalos & Indrajit Ray & Sonali SenGupta, 2020. "Nash versus coarse correlation," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1178-1204, December.
    11. Fortin, Bernard & Lacroix, Guy & Villeval, Marie-Claire, 2007. "Tax evasion and social interactions," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2089-2112, December.
    12. Bougherara, Douadia & Denant-Boemont, Laurent & Masclet, David, 2011. "Cooperation and framing effects in provision point mechanisms: Experimental evidence," Ecological Economics, Elsevier, vol. 70(6), pages 1200-1210, April.
    13. Anke Gerbery & Thorsten Hensz & Bodo Vogtx, 2010. "Rational Investor Sentimentina Repeated Stochastic Game with Imperfect Monitoring," Post-Print hal-00911824, HAL.
    14. Torgler, Benno, 2011. "Tax morale and compliance : review of evidence and case studies for Europe," Policy Research Working Paper Series 5922, The World Bank.
    15. Keser, Claudia & Ehrhart, Karl-Martin & Berninghaus, Siegfried K., 1998. "Coordination and local interaction: experimental evidence," Economics Letters, Elsevier, vol. 58(3), pages 269-275, March.
    16. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
    17. Bowles, Samuel & Hwang, Sung-Ha, 2008. "Social preferences and public economics: Mechanism design when social preferences depend on incentives," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1811-1820, August.
    18. Klaus Abbink & Heike Hennig-Schmidt, 2006. "Neutral versus loaded instructions in a bribery experiment," Experimental Economics, Springer;Economic Science Association, vol. 9(2), pages 103-121, June.
    19. Rege, Mari & Telle, Kjetil, 2004. "The impact of social approval and framing on cooperation in public good situations," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1625-1644, July.
    20. Laurent Denant-Boemont & Olivier L’Haridon, 2013. "La rationalité à l'épreuve de l'économie comportementale," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 35-89.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:oplwec:qt5h6970h8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/lebrkus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.