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Rules, rule-following and cooperation

Author

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  • Kimbrough, E.O.

    (Microeconomics & Public Economics)

  • Vostroknutov, A.

    (Microeconomics & Public Economics)

Abstract

Rules are thought to persist to the extent that the direct benefits of having them (e.g. reduced transactions costs) exceed the costs of enforcement and of occasional misapplications. We argue that a second crucial role of rules is as screening mechanisms for identifying cooperative types. Thus we underestimate the social value of rules when we consider only their instrumental value in solving a particular problem. We demonstrate experimentally that costly rule-following can be used to screen for conditional cooperators. Subjects participate in a rule-following task in which they may incur costs to follow an arbitrary written rule in an individual choice setting. Without their knowledge, we sort them into groups according to their willingness to follow the rule. These groups then play repeated public goods or trust games. Rule-following groups sustain high public goods contributions over time, but in rule-breaking groups cooperation decays. Rulefollowers also reciprocate more in trust games. However, when individuals are not sorted by type, we observe no differences in the behavior of rule-followers and rule-breakers.
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Suggested Citation

  • Kimbrough, E.O. & Vostroknutov, A., 2012. "Rules, rule-following and cooperation," Research Memorandum 053, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  • Handle: RePEc:unm:umamet:2012053
    DOI: 10.26481/umamet.2012053
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    References listed on IDEAS

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    1. Rules, Rule-Following, and Cooperation
      by Nicholas Gruen in Club Troppo on 2012-07-24 19:36:30

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    Cited by:

    1. Montizaan, R.M. & de Grip, A. & Fouarge, D., 2015. "Training access, reciprocity, and expected retirement age," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    2. Andries de Grip & Didier Fouarge & Raymond Montizaan, 2013. "How Sensitive are Individual Retirement Expectations to Raising the Retirement Age?," De Economist, Springer, vol. 161(3), pages 225-251, September.
    3. Herings, P.J.J. & Meshalkin, A.V. & Predtetchinski, A., 2012. "A folk theorem for bargaining games," Research Memorandum 055, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    4. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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