Université de Lausanne
Ecole des HEC
Département d'économétrie et d'économie politique

DEEP-IGTG Seminar Series in Microeconomic Theory

Thursday April 3, 2008, 12:00
Extranef, room 126

Karl SIGMUND
(University of Vienna, Austria)

Cooperation in Public Goods -- Between Freedom and Enforcement

Abstract
In human societies, cooperative behaviour in joint enterprises is often enforced through institutions that impose sanctions on free-riders. Many experiments on so-called public goods games have shown that in the absence of such institutions, individuals are willing to punish defectors, even at a cost to themselves, effectively 'taking the law into their own hands'. Theoretical models confirm that social norms prescribing the punishment of uncooperative behaviour are stable: once established, they prevent dissident minorities from spreading. But how can such costly punishing behaviour gain a foothold in the population? A surprisingly simple model shows that if individuals have the option to stand aside and abstain from the joint endeavour, this paves the way for the emergence and establishment of cooperative behaviour based on the punishment of defectors. Thus the freedom to withdraw from the common enterprise leads to prosocial coercion. Paradoxically, non-participation can catalyse the emergence of cooperative behaviour based on punishing members who do not contribute. Collaborative interactions which are obligatory rather than voluntary are less likely to lead to cooperation.

Web site of the seminar (with paper online): http://www.hec.unil.ch/deep/evenements-english/e-sem-all-2007-08.htm