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Institutions and Behavior: Experimental Evidence on the Effects of Democracy

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Pedro Dal Bo
Andrew Foster
Louis Putterman

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Abstract

We present results from a novel experiment on the effect of a policy designed to encourage cooperation in a prisoner's dilemma game. We find that the effect of this policy on the level of cooperation is greater when it was chosen democratically by the subjects than when it was exogenously imposed. This difference remains after controlling for selection (those that choose the plicy may be more likely to be affected by it). We conclude that the treatment effect of policies may depend on whether they are endogenous or exogenous to the society on which they are imposed. Therefore, democratic institutions may have an effect on behavior in addition to the effect in terms of policy choice. More generally, our findings have implications for empirical studies of treatment effects in other contexts: the effect of a treatment may depend on whether it is endogenous or exogenous.

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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2007-9.

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Date of creation: 2007
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Handle: RePEc:bro:econwp:2007-9

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Postal: Department of Economics, Brown University, Providence, RI 02912

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ernesto Dal Bó & Pedro Dal Bó & Jason Snyder, 2007. "Political Dynasties," NBER Working Papers 13122, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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