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Noncooperative Support of Public Norm Enforcement in Large Societies

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  • Josef Falkinger

Abstract

In small groups norm enforcement is provided by mutual punishment and reward. In large societies we have enforcement institutions. This paper shows how such institutions can emerge as a decentralized equilibrium. In a first stage, individuals invest in a public enforcement technology. This technology generates a sanctioning system whose effectiveness depends on the aggregate amount of invested resources. In a second stage, in which individuals contribute to the provision of a public good, the sanctioning system imposes penalties and rewards on deviations from the endogenous norm contribution. It is shown that even if group size goes to infinity public norm enforcement is supported in a noncooperative equilibrium. Psychological factors are not necessary but can be favorable for the emergence of effective public norm enforcement.

Suggested Citation

  • Josef Falkinger, 2004. "Noncooperative Support of Public Norm Enforcement in Large Societies," CESifo Working Paper Series 1368, CESifo.
    • Handle: RePEc:ces:ceswps:_1368
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp1368.pdf
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    Cited by:

    1. Alessandro Balestrino, "undated". "Tax Avoidance, Endogenous Social Norms, and the Comparison Income Effect," EPRU Working Paper Series 05-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics, revised Dec 2005.
    2. Balestrino, Alessandro, 2008. "It is a theft but not a crime," European Journal of Political Economy, Elsevier, vol. 24(2), pages 455-469, June.
    3. Balestrino, Alessandro & Ciardi, Cinzia, 2008. "Social norms, cognitive dissonance and the timing of marriage," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2399-2410, December.
    4. Michael Kosfeld & Akira Okada & Arno Riedl, 2009. "Institution Formation in Public Goods Games," American Economic Review, American Economic Association, vol. 99(4), pages 1335-1355, September.
    5. Wolfgang Buchholz & Josef Falkinger & Dirk Rübbelke, 2014. "Non-Governmental Public Norm Enforcement in Large Societies as a Two-Stage Game of Voluntary Public Good Provision," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 899-916, December.
    6. Francesca Bortolami & Luigi Mittone, 2009. "Does Participating in a Collective Decision Affect the Levels of Contributions Provided? An Experimental Investigation," CEEL Working Papers 0902, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    7. Christian Traxler & Mathias Spichtig, 2011. "Social norms and the indirect evolution of conditional cooperation," Journal of Economics, Springer, vol. 102(3), pages 237-262, April.
    8. Juergen Bracht & Nick Feltovich, 2006. "Efficiency in the Trust Game: an Experimental Study of Preplay Contracting," The Centre for Market and Public Organisation 06/154, The Centre for Market and Public Organisation, University of Bristol, UK.

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    Keywords

    norm enforcement; public goods; institutions; sanctioning;
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