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Learning to cooperate in the shadow of the law

Roberto Galbiati, Emeric Henry and Nicolas Jacquemet

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Formal enforcement punishing defectors can sustain cooperation by changing incentives. In this paper, we introduce a second effect of enforcement: it can also affect the capacity to learn about the group's cooperativeness. Indeed, in contexts with strong enforcement, it is difficult to tell apart those who cooperate because of the threat of fines from those who are intrinsically cooperative types. Whenever a group is intrinsically cooperative, enforcement will thus have a negative dynamic effect on cooperation because it slows down learning about prevalent values in the group that would occur under a weaker enforcement. We provide theoretical and experimental evidence in support of this mechanism. Using a lab experiment with independent interactions and random rematching, we observe that, in early interactions, having faced an environment with fines in the past decreases current cooperation. We further show that this results from the interaction between enforcement and learning: the effect of having met cooperative partners has a stronger effect on current cooperation when this happened in an environment with no enforcement. Replacing one signal of deviation without fine by a signal of cooperation without fine in a player's history increases current cooperation by 10%; while replacing it by a signal of cooperation with fine increases current cooperation by only 5%.

Keywords: Enforcement; social values; cooperation; learning; spillovers; repeated games; experiments (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-exp, nep-gth, nep-law and nep-mac
Note: View the original document on HAL open archive server: https://hal.science/hal-04511257
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Published in Journal of the Economic Science Association, inPress, ⟨10.1007/s40881-023-00159-x⟩

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Related works:
Working Paper: Learning to cooperate in the shadow of the law (2024) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2024) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2024) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2019) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2019) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2019) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2019) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2019) Downloads
Working Paper: Learning to cooperate in the shadow of the law (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-04511257

DOI: 10.1007/s40881-023-00159-x

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