Institutions influence preferences: Evidence from a common pool resource experiment

Carlos Rodriguez-Sickert (), Ricardo Guzmán () and Juan-Camilo Cardenas

Journal of Economic Behavior & Organization, 2008, vol. 67, issue 1, 215-227

Abstract: We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting our model to experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion. Low fines stabilize cooperation by preventing a spiral of negative reciprocation.

Date: 2008
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Working Paper: INSTITUTIONS INFLUENCE PREFERENCES: EVIDENCE FROM A COMMON POOL RESOURCE EXPERIMENT (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:67:y:2008:i:1:p:215-227

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