Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs
- American Economic Journal: Microeconomics (Forthcoming)
Most institutions are limited in scope. We study experimentally
how enforcement institutions affect behavior, preferences and beliefs
beyond their direct influence over the behaviors they control.
Groups play two identical public good games, with cooperation institutionally
enforced in one game. Institutions generally have economically
significant positive spillover effects to the unregulated
game. We also observe that institutions enhance conditional cooperation
preferences and beliefs about others' cooperativeness, suggesting
that both factors are drivers of observed spillover effects.
In additional treatments, we provide evidence for several factors,
including characteristics of institutions, that enhance or limit the
eectiveness and scope of spillover effects.
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