Institutions influence preferences: Evidence from a common pool resource experiment
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Date
2008
Journal Title
Journal ISSN
Volume Title
Publisher
ELSEVIER SCIENCE BV
Abstract
We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting Our model to experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion. Low fines stabilize cooperation by preventing a spiral of negative reciprocation. (C) 2007 Elsevier B.V. All rights reserved.
Description
Keywords
experimental economics, social norms, internalization of preferences, learning, common pool resource games, PUBLIC-GOODS EXPERIMENTS, COOPERATION