Evolutionary norm enforcement

Werner Güth () and Axel Ockenfels

No 1999,84, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: Applying an indirect evolutionary approach with endogenous preference formation, we show that a legal system can induce players to reward trust even if material incentives dictate to exploit trust. By analyzing the crowding out or crowding in of trustworthiness implied by various verdict rules, we can assess how a court influences the share of kept promises of truly trustworthy players who evolutionarily evolved as trustworthy and of opportunistic players who are only trustworthy if inspired by material incentives.

Date: 1999
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Related works:
Journal Article: Evolutionary Norm Enforcement (2000)
Working Paper: Evolutionary Norm Enforcement (2000)
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