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Sustaining Cooperation: Community Enforcement vs. Specialized Enforcement

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  • Daron Acemoglu
  • Alexander Wolitzky

Abstract

We introduce the possibility of direct punishment by specialized enforcers into a model of community enforcement. Specialized enforcers need to be given incentives to carry out costly punishments. Our main result shows that, when the specialized enforcement technology is sufficiently effective, cooperation is best sustained by a “single enforcer punishment equilibrium,” where any deviation by a regular agent is punished only once, and only by enforcers. In contrast, enforcers themselves are disciplined (at least in part) by community enforcement. The reason why there is no community enforcement following deviations by regular agent is that such actions, by reducing future cooperation, would decrease the amount of punishment that enforcers are willing to impose on deviators. Conversely, when the specialized enforcement technology is ineffective, optimal equilibria do punish deviations by regular agents with community enforcement. The model thus predicts that societies with more advanced enforcement technologies should rely on specialized enforcement, while less technologically advanced societies should rely on community enforcement. Our results hold both under perfect monitoring of actions and under various types of private monitoring.
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  • Daron Acemoglu & Alexander Wolitzky, 2015. "Sustaining Cooperation: Community Enforcement vs. Specialized Enforcement," Levine's Bibliography 786969000000001179, UCLA Department of Economics.
    • Handle: RePEc:cla:levrem:786969000000001179
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    Cited by:

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    2. DeAngelo, Gregory & Gee, Laura Katherine, 2018. "Peers or Police? Detection and Sanctions in the Provision of Public Goods," IZA Discussion Papers 11540, Institute of Labor Economics (IZA).
    3. Anja Prummer, 2018. "Religious & Cultural Leaders," Working Papers 853, Queen Mary University of London, School of Economics and Finance.
    4. Adriana Alventosa & Gonzalo Olcina, 2017. "On the emergence of a sanctioning institution," Discussion Papers in Economic Behaviour 0417, University of Valencia, ERI-CES.
    5. David K Levine & Andrea Mattozzi & Salvatore Modica, 2022. "Social Mechanisms and Political Economy: When Lobbyists Succeed, Pollsters Fail and Populists Win," Levine's Working Paper Archive 11694000000000148, David K. Levine.
    6. Aldashev, Gani & Zanarone, Giorgio, 2017. "Endogenous enforcement institutions," Journal of Development Economics, Elsevier, vol. 128(C), pages 49-64.
    7. Pin, Paolo & Rogers, Brian W., 2015. "Cooperation, punishment and immigration," Journal of Economic Theory, Elsevier, vol. 160(C), pages 72-101.
    8. Xiang, Wang, 2020. "Who will watch the watchers? On optimal monitoring networks," Journal of Economic Theory, Elsevier, vol. 187(C).
    9. Emilio Bisetti & Benjamin Tengelsen & Ariel Zetlin‐Jones, 2022. "Moral Hazard In Remote Teams," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1595-1623, November.
    10. Jan Falkowski & Pavel Ciaian, 2016. "Factors Supporting the Development of Producer Organizations and their Impacts in the Light of Ongoing Changes in Food Supply Chains: A Literature Review," JRC Research Reports JRC101617, Joint Research Centre.
    11. DeAngelo, Gregory & Humphreys, Brad R. & Reimers, Imke, 2017. "Are public and private enforcement complements or substitutes? Evidence from high frequency data," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 151-163.

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    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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