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Normative conflict and the limits of self-governance in heterogeneous populations

Listed author(s):
  • Lata Gangadharan

    (Monash University)

  • Nikos Nikiforakis

    (DistriNet - Distributed Systems and Computer Networks - KU Leuven - Katholieke Universiteit Leuven, KU-IBBT - FUTURE HEALTH DEPARTMENT [KU Leuven] - KU Leuven - Katholieke Universiteit Leuven)

  • Marie Villeval

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality – a normative conflict – which is overlooked. Agents' concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism allowing individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no conflict between efficiency and equality – the mechanism permits groups to obtain maximum efficiency. This is not the case in heterogeneous populations despite the fact that individuals could use rewards to resolve the normative conflict. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest normative conflict can be difficult to overcome, imposing limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.

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File URL: https://halshs.archives-ouvertes.fr/halshs-01208230v2/document
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Paper provided by HAL in its series Working Papers with number halshs-01208230.

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Date of creation: 2017
Handle: RePEc:hal:wpaper:halshs-01208230
DOI: 10.2139/ssrn.2665966
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01208230v2
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