Social Norms, Endogenous Sorting and the Culture of Cooperation

University of Zurich, Department of Economics, Working Paper No 267, Revised version

42 Pages Posted: 1 Nov 2017 Last revised: 20 Apr 2018

See all articles by Ernst Fehr

Ernst Fehr

University of Zurich - Department of Economics

Tony Williams

London School of Economics & Political Science (LSE) - Department of Social Psychology

Multiple version iconThere are 3 versions of this paper

Date Written: April 2018

Abstract

Throughout human history, informal sanctions by peers were ubiquitous and played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of experimental evidence suggests that informal peer sanctions cause large collateral damage and efficiency costs. This raises the question whether peer sanctioning systems exist that avoid these costs and whether other, more centralized, punishment systems are superior and will be preferred by the people. Here, we show that welfare-enhancing peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior. The exogenous removal of the norm consensus opportunity reduces the efficiency of peer punishment and renders centralized sanctioning by an elected judge the dominant institution. However, if given the choice, subjects universally reject peer sanctioning without a norm consensus opportunity – an institution that has hitherto dominated research in this field – in favor of peer sanctioning with a norm consensus opportunity or an equally efficient institution with centralized punishment by an elected judge. Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects’ cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision.

Keywords: Cooperation, punishment, endogenous institutions, public goods

JEL Classification: D02, D03, D72, H41

Suggested Citation

Fehr, Ernst and Williams, Tony, Social Norms, Endogenous Sorting and the Culture of Cooperation (April 2018). University of Zurich, Department of Economics, Working Paper No 267, Revised version. Available at SSRN: https://ssrn.com/abstract=3062528 or http://dx.doi.org/10.2139/ssrn.3062528

Ernst Fehr (Contact Author)

University of Zurich - Department of Economics ( email )

Blümlisalpstrasse 10
Zuerich, 8006
Switzerland
+41 1 634 3709 (Phone)
+41 1 634 4907 (Fax)

Tony Williams

London School of Economics & Political Science (LSE) - Department of Social Psychology ( email )

United States

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