Abstract
Can formal institutions shape prosocial behavior and lead to the spillover effect of cooperation? To explore this question, we experimentally test the spillover- based theory in a novel context. We measured the spillover effect on cooperation in the same domain measured by the repeated anonymous public goods game. We found strong evidence of altruism. Our results are inconsistent with prediction of the spillover-based theory. Our finding suggests that exposure to strong formal institutions that provide top-down motivation for cooperation substantially improves cooperation in their presence, but do not seem to lead to more prosociality after their absence.
Highlights
In economic literature, the “tragedy of the commons” is probably the best-known example of when collective welfare is jeopardized by individual self-interest (Hardin, 1968)
Our finding suggests that exposure to strong formal institutions that provide top-down motivation for cooperation substantially improves cooperation in their presence, but do not seem to lead to more prosociality after their absence
Our results suggest that a strong formal institution does not seem to foster prosociality via spillovers in the same domain
Summary
The “tragedy of the commons” is probably the best-known example of when collective welfare is jeopardized by individual self-interest (Hardin, 1968). The “free rider problem”, arising from the fact that an individual may be able to obtain the benefits of a good without contributing to its cost, is discussed in a number of different contexts. Provision of public goods is vulnerable to free riding; one can receive a benefit without contributing towards the cost of its production. Society has responded to the “free rider problem” by developing formal institutions precisely to prevent this type of opportunistic behavior. Courts, and police are all examples of formal institutions put in place by society in order to provide protection against free riding behavior.
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