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Social Norms, Endogenous Sorting and the Culture of Cooperation

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  • Ernst Fehr
  • Tony Williams

Abstract

Throughout human history, informal sanctions by peers were ubiquitous and played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of experimental evidence suggests that informal peer sanctions cause large collateral damage and efficiency costs. This raises the question whether peer sanctioning systems exist that avoid these costs and whether other, more centralized, punishment systems are superior and will be preferred by the people. Here, we show that welfare-enhancing peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior. The exogenous removal of the norm consensus opportunity reduces the efficiency of peer punishment and renders centralized sanctioning by an elected judge the dominant institution. However, if given the choice, subjects universally reject peer sanctioning without a norm consensus opportunity – an institution that has hitherto dominated research in this field – in favor of peer sanctioning with a norm consensus opportunity or an equally efficient institution with centralized punishment by an elected judge. Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects’ cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision.

Suggested Citation

  • Ernst Fehr & Tony Williams, 2018. "Social Norms, Endogenous Sorting and the Culture of Cooperation," CESifo Working Paper Series 7003, CESifo.
  • Handle: RePEc:ces:ceswps:_7003
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    3. Lim Wooyoung & Zhang Jipeng, 2020. "Endogenous Authority and Enforcement in Public Goods Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(2), pages 1-22, June.
    4. Jan Philipp Krügel & Nicola Maaser, 2020. "Cooperation and Norm-Enforcement under Impartial vs. Competitive Sanctions," Economics Working Papers 2020-15, Department of Economics and Business Economics, Aarhus University.
    5. Kamei, Kenju, 2019. "Cooperation and Endogenous Repetition in an Infinitely Repeated Social Dilemma: Experimental Evidence," MPRA Paper 92097, University Library of Munich, Germany.
    6. Liu, Jia & Riyanto, Yohanes E. & Zhang, Ruike, 2020. "Firing the right bullets: Exploring the effectiveness of the hired-gun mechanism in the provision of public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 222-243.
    7. Gregory DeAngelo & Bryan C. McCannon, 2020. "Psychological game theory in public choice," Public Choice, Springer, vol. 182(1), pages 159-180, January.
    8. Cobo-Reyes, Ramón & Katz, Gabriel & Meraglia, Simone, 2019. "Endogenous sanctioning institutions and migration patterns: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 575-606.
    9. Morgan, Stephen N. & Mason, Nicole M. & Shupp, Robert S., 2019. "The effects of voice with(out) punishment: Public goods provision and rule compliance," Journal of Economic Psychology, Elsevier, vol. 74(C).
    10. Kurt A. Ackermann & Ryan O. Murphy, 2019. "Explaining Cooperative Behavior in Public Goods Games: How Preferences and Beliefs Affect Contribution Levels," Games, MDPI, Open Access Journal, vol. 10(1), pages 1-34, March.
    11. Brütt, Katharina & Schram, Arthur & Sonnemans, Joep, 2020. "Endogenous group formation and responsibility diffusion: An experimental study," Games and Economic Behavior, Elsevier, vol. 121(C), pages 1-31.
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    13. Gallier, Carlo, 2020. "Democracy and compliance in public goods games," European Economic Review, Elsevier, vol. 121(C).
    14. DeAngelo, Gregory & Gee, Laura K., 2020. "Peers or police?: The effect of choice and type of monitoring in the provision of public goods," Games and Economic Behavior, Elsevier, vol. 123(C), pages 210-227.

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    More about this item

    Keywords

    cooperation; punishment; endogenous institutions; public goods;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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