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Norms, Emotions, and Culture in Human Cooperation and Punishment: Theory and Evidence

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  • Sanjit Dhami
  • Mengxing Wei

Abstract

We consider the psychological and social foundations of human contributions and punishments in social dilemma situations using a voluntary contributions mechanism with punishment (VCMP). We provide beliefs-based theoretical microfoundations, reliant on human emotions, for the inherent human tendency to follow social norms and punish norm violators, while respecting boundedly rational strategic decision making. The predictions are successfully tested with pre-registered experiments in China and the UK. The emotions of shame, frustration, and anger, that arise endogenously in our model, and are formally modelled through belief hierarchies, play a key role. Contributions to public goods are motivated by social norms of contributions; and punishments are induced through frustration/anger at non-contributors. We also show how theory might account for cross-cultural differences in behavior.

Suggested Citation

  • Sanjit Dhami & Mengxing Wei, 2023. "Norms, Emotions, and Culture in Human Cooperation and Punishment: Theory and Evidence," CESifo Working Paper Series 10220, CESifo.
    • Handle: RePEc:ces:ceswps:_10220
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    More about this item

    Keywords

    cooperation and punishment; emotions-shame; frustration; anger; social norms; culture; bounded rationality;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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