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Establishing Cooperation between Groups: Ingroup versus Outgroup Punishment

  • Christian Stoff
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    We analyse interethnic cooperation in an infinitely repeated prisoner’s dilemma when members of one group are unable to target punishment towards individual defectors from the other group. We first show that indiscriminate punishment may sustain cooperation in this setting. Our main result, however, is that the introduction of ingroup punishment in addition to outgroup punishment represents a better sanctioning institution in the sense that cooperative outcomes may persist in situations where outgroup punishment alone fails to induce cooperation. Our findings are consistent with historical evidence on the dynamics of interethnic conflicts.

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    File URL: http://www.soi.uzh.ch/research/wp/2004/wp0416.pdf
    File Function: Revised version, 2006
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    Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0416.

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    Length: 51 pages
    Date of creation: Dec 2004
    Date of revision: Feb 2006
    Handle: RePEc:soz:wpaper:0416
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    12. Bowles, Samuel & Gintis, Herbert, 2004. "Persistent parochialism: trust and exclusion in ethnic networks," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 1-23, September.
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    14. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
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