Abstract
Evidence from field and laboratory experiments indicates that a large fraction of the people behave like conditional cooperators public good games. In this article, I investigate the implications of the existence of both conditional cooperators and egoists for optimal law enforcement strategies. When norms of cooperation exist between conditional cooperators, sanctions set by an authority can be lower than a Hobbesian setting where everybody is egoistic. Moreover, if the authorities have private information about the fraction of egoists society, low sanctions can be optimal because they signal that there are few defectors and thus crowd in trust and cooperation between agents. In social dilemmas where conditional cooperation is an important factor, as is the case tax compliance, the model provides a rationale for the low observed sanctions the real world and the mixed evidence on the effectiveness of deterrence. The Author 2009. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call