Evolutionary Norm Enforcement

18 Pages Posted: 28 Mar 2001

See all articles by Werner Guth

Werner Guth

Max Planck Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Axel Ockenfels

University of Cologne - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 2000

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.

JEL Classification: B4, D8, K0, K4

Suggested Citation

Güth, Werner and Ockenfels, Axel, Evolutionary Norm Enforcement (August 2000). CESifo Working Paper Series No. 331. Available at SSRN: https://ssrn.com/abstract=263344

Werner Güth (Contact Author)

Max Planck Institute of Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Axel Ockenfels

University of Cologne - Department of Economics ( email )

Albertus Magnus Platz
Cologne 50923
Germany

HOME PAGE: http://ockenfels.uni-koeln.de/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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