Civic Capital in Two Cultures: The Nature of Cooperation in Romania and USA
61 Pages Posted: 3 Jan 2013
Date Written: December 28, 2012
We experimentally investigate the nature of cooperation in various repeated games, with subjects from Romania and USA. We find stark cross-country differences in the propensity to sustain multilateral cooperation through bilateral rewards and punishments. U.S. groups perform well because sufficiently many cooperators are willing to discipline free riders. Romanian cooperators are less prone to jeopardize their productive bilateral relationships for the benefit of the group, collectively failing to provide adequate discipline. Our analysis indicates that the performance differences constitute a group-level phenomenon, being largely due differences in shared beliefs rather than differences in individuals’ preferences.
JEL Classification: D20, D30
Suggested Citation: Suggested Citation