Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs
72 Pages Posted: 16 Sep 2020
Date Written: August 3, 2020
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: Suggested Citation