Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs

72 Pages Posted: 16 Sep 2020

See all articles by Florian Engl

Florian Engl

University of Cologne - Faculty of Management, Economics and Social Sciences; CESifo (Center for Economic Studies and Ifo Institute)

Arno Riedl

Maastricht University; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Netspar

Roberto A. Weber

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

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Date Written: August 3, 2020

Abstract

Most institutions are limited in scope. We study experimentally how enforcement institutions affect behavior, preferences and beliefs beyond their direct influence over the behaviors they control. Groups play two identical public good games, with cooperation institutionally enforced in one game. Institutions generally have economically significant positive spillover effects to the unregulated game. We also observe that institutions enhance conditional cooperation preferences and beliefs about others' cooperativeness, suggesting that both factors are drivers of observed spillover effects. In additional treatments, we provide evidence for several factors, including characteristics of institutions, that enhance or limit the effectiveness and scope of spillover effects.

Keywords: Public goods, institutions, spillover effect, social preferences, beliefs

JEL Classification: C92, D02, D72, H41

Suggested Citation

Engl, Florian and Riedl, Arno M. and Weber, Roberto A., Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs (August 3, 2020). Available at SSRN: https://ssrn.com/abstract=3666456 or http://dx.doi.org/10.2139/ssrn.3666456

Florian Engl

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Richard-Strauss-Str. 2
Cologne, D-50923
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Arno M. Riedl (Contact Author)

Maastricht University ( email )

Department of Economics (AE1)
P.O. Box 616
Maastricht, 6200 MD
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Roberto A. Weber

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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