In Search for Rules that Secure Gains from Cooperation: The Heuristic Value of Social Dilemmas for Normative Institutional Economics

Martin Luther Universitat Halle Wittenberg Working Paper No. 05-6

25 Pages Posted: 15 Mar 2007

See all articles by Ingo Pies

Ingo Pies

Martin-Luther-University Halle-Wittenberg

Martin Petrick

Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO)

Date Written: 2005

Abstract

We ask how normative statements are possible within an economic theory framework that recognises the importance of institutional arrangements. Instead of applying established outcome-oriented criteria of social welfare, we examine whether the rules of economic interaction allow the acquisition of gains from cooperation. We suggest to reconstruct any interaction as an existing or repealed social dilemma. This approach helps to identify common rule interests which create room for improvement of all parties involved, and to suggest desirable institutional reforms. Our policy applications include credit markets in developing countries and the unemployment problem in Europe.

Keywords: Social Dilemma, Cooperation, Institutional Economics, Normativity, Rules

JEL Classification: D02, D63, D74

Suggested Citation

Pies, Ingo and Petrick, Martin, In Search for Rules that Secure Gains from Cooperation: The Heuristic Value of Social Dilemmas for Normative Institutional Economics (2005). Available at SSRN: https://ssrn.com/abstract=970520 or http://dx.doi.org/10.2139/ssrn.970520

Ingo Pies (Contact Author)

Martin-Luther-University Halle-Wittenberg ( email )

Grosse Steinstrasse 73
Halle/Saale, DE Saxony-Anhalt 06108
Germany
+49 0 345 55 23420 (Phone)

HOME PAGE: http://ethik.wiwi.uni-halle.de/2166_199920/2166_199912/

Martin Petrick

Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO) ( email )

Germany

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