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Spillovers, Persistence and Learning: Institutions and the Dynamics of Cooperation

Roberto Galbiati, Emeric Henry and Nicolas Jacquemet ()

No 12128, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how cooperation-enforcing institutions dynamically affect values and behavior using a lab experiment designed to create individual specific histories of past institutional exposure. We show that the effect of past institutions is mostly due to "indirect" behavioral spillovers: facing penalties in the past increases partners' cooperation in the past, which in turn positively affects ones' own current behavior. We demonstrate that such indirect spillovers induce persistent effects of institutions. However, for interactions that occur early on, we find a negative effect of past enforcement due to differential learning under different enforcement institutions.

Keywords: Cooperation; experiments.; Laws; learning; persistence of institutions; repeated games; social values; Spillovers (search for similar items in EconPapers)
JEL-codes: C73 C91 D02 K49 P16 Z1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-gth and nep-soc
Date: 2017-07
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