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Learning to cooperate in the shadow of the law

Published online by Cambridge University Press:  01 January 2025

Roberto Galbiati ,
Emeric Henry  and
Nicolas Jacquemet Open the ORCID record for Nicolas Jacquemet [Opens in a new window]
Roberto Galbiati*
Affiliation:
Department of Economics, CNRS-Sciences Po and CEPR, 28 rue des Saints-Pères, 75007 Paris, France
Emeric Henry*
Affiliation:
Department of Economics, CNRS-Sciences Po and CEPR, 28 rue des Saints-Pères, 75007 Paris, France
Nicolas Jacquemet*
Affiliation:
Paris School of Economics and University Paris 1 Panthéon-Sorbonne, Centre d’Economie de la Sorbonne, 106 Bd de l’hopital, 75013 Paris, France
*
[email protected]
[email protected]
[email protected]
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Abstract

Formal enforcement punishing defectors can sustain cooperation by changing incentives. In this paper, we introduce a second effect of enforcement: it can also affect the capacity to learn about the group's cooperativeness. Indeed, in contexts with strong enforcement, it is difficult to tell apart those who cooperate because of the threat of fines from those who are intrinsically cooperative types. Whenever a group is intrinsically cooperative, enforcement will thus have a negative dynamic effect on cooperation because it slows down learning about prevalent values in the group that would occur under a weaker enforcement. We provide theoretical and experimental evidence in support of this mechanism. Using a lab experiment with independent interactions and random rematching, we observe that, in early interactions, having faced an environment with fines in the past decreases current cooperation. We further show that this results from the interaction between enforcement and learning: the effect of having met cooperative partners has a stronger effect on current cooperation when this happened in an environment with no enforcement. Replacing one signal of deviation without fine by a signal of cooperation without fine in a player's history increases current cooperation by 10%; while replacing it by a signal of cooperation with fine increases current cooperation by only 5%.

Keywords

EnforcementSocial valuesCooperationLearningSpilloversRepeated gamesExperiments

JEL classification

K49: Other P16: Political Economy D02: Institutions: Design, Formation, Operations, and Impact Z1: Cultural Economics • Economic Sociology • Economic Anthropology C91: Laboratory, Individual Behavior C73: Stochastic and Dynamic Games • Evolutionary Games • Repeated Games
Type
Original Paper
Information
Journal of the Economic Science Association , Volume 10 , Issue 2: Special Issue: Behavioral and Experimental Economics for Innovative Policy-Making (Articles 1 to 3) , December 2024 , pp. 165 - 198
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2024.

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