Self-Regulatory Resources and Institutional Formation: A First Experimental Test

This study reports the result of a novel laboratory experiment that shows for the first time that the state of people fs self-regulatory resources influences reliance on formal enforcement of norms in a social dilemma. In a laboratory, subjects f self-regulatory resources are rigorously manipulated using well-known depletion tasks. On the one hand, when their resources are not depleted, the vast majority decide to govern themselves through monitoring and decentralized peer-to-peer punishment in a public goods dilemma, and then successfully achieve high cooperation norms. On the other hand, when their resources are small, the majority vote to enact a costly formal sanctioning institution and then construct deterrent punishment toward free riders; backed by formal punishment, the groups achieve strong cooperation. A supplementary survey regarding the Covid-19 pandemic was also conducted to enhance the external validity of the finding, generating a similar pattern. The so-called self-control and commitment preferences combined with inequality aversion can explain these patterns, because the theory predicts that those with smaller self-regulatory resources are motivated to remove temptations in advance as a commitment device, thereby avoiding a large self-control cost. This underscores the role of commitment in a social dilemma context.