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Dynamic effects of enforcement on cooperation

Roberto Galbiati, Emeric Henry and Nicolas Jacquemet ()

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

Abstract: In situations where social payoffs are not aligned with private incentives, enforcement with fines can be a way to sustain cooperation. In this paper we show, by the means of a lab experiment , that past fines can have an effect on current behavior even when no longer in force. We document two mechanisms: a) past fines affect directly individuals' future propensity to cooperate; b) when fines for non cooperation are in place in the past, individuals experience higher levels of cooperation from partners and, consistent with indirect reciprocity motives, are in turn nicer towards others once these fines have been removed. This second mechanism is empirically prevalent and, in contrast with the first, induces a snowball effect of past enforcement. Our results can inform the design of costly enforcement policies.

Keywords: experiments; Laws; social values; cooperation; learning; spillovers; persistence of institutions; repeated games (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-cse, nep-exp, nep-gth and nep-soc
Date: 2018-12
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01971468
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Published in Proceedings of the National Academy of Sciences of the United States of America , National Academy of Sciences, 2018, 115 (49), pp.12425-12428. 〈10.1073/pnas.1813502115〉

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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-01971468

DOI: 10.1073/pnas.1813502115

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