Resentment and the Evolution of Cooperative Norms

Abstract

Cross-cultural experiments find that a) cooperation is higher in large societies with greater degrees of market integration than in small-scale societies, and b) cooperation is positively correlated with the quality of law enforcement across societies. The findings are at odds with existing evolutionary models. We study a stochastically dynamic model based on the individual psychology of norm-based resentment. The model describes how cooperation and costly punishment co-evolve and generates predictions consistent with the observed regularities.

Keywords: Social norms, cooperation, costly punishment, stochastic dynamics, stochastic stability

JEL Classification: C73, D63, H41