Voting with Feet: Community Choice in Social Dilemmas

Economic and social interactions often take place in open communities but the dynamics of the community choice process and its impact on cooperation of its members are yet not well understood. We experimentally investigate community choice in social dilemmas. Participants repeatedly choose between a community with and an alternative without punishment opportunities. Within each community a social dilemma game is played. While the community with punishment grows over time and fully cooperates, the alternative becomes depopulated. We analyze the success of this "voting with feet" mechanism and find that endogenous self-selection is key while slow growth is less decisive.cooperation, social dilemmas, community choice, punishment, voting with feet

Endogenous Institution Choice in Social Dilemmas

Die ökonomische Theorie kann viele Facetten des kooperativen Verhaltens, die durch einen Konflikt zwischen Individual- und Gemeinschaftsinteressen gekennzeichnet sind, wie z.B. Kooperation in sozialen Dilemmasituationen, nicht umfassend erklären. Empirische Evidenz aus experimentellen Untersuchungen zeigt, dass sogar elementare institutionelle Rahmenbedingungen wie einfache Belohnungs- oder Bestrafungsmechanismen Kooperation fördern können, falls diese in einer Gesellschaft von Außen (exogen) „installiert“ werden. Die Frage, ob diese Sanktionsmechanismen von Individuen selbst (endogen) gewählt und einen Wettbewerb mit alternativen Institutionen „überleben“ würden, ist noch nicht ausreichend beantwortet worden. Diese Dissertation trägt zur Kooperationsforschung bei, indem sie die endogene Wahl von Institutionen wie Bestrafungs- und Belohnungsmechanismen und deren Auswirkungen auf Kooperationsverhalten in sozialen Dilemmasituationen untersucht.Standard economic theory fails to explain many facets of cooperative behavior, e.g., cooperation in social dilemma situations which are characterized by the conflict between individual and collective interests. There is empirical evidence from experimental studies showing that even elementary institutional arrangements such as simple reward or punishment mechanisms can foster cooperation when these mechanisms are exogenously “installed” in a community. The question of whether these sanctioning mechanisms would be endogenously chosen by individuals and “survive” a competition with alternative institutions is not yet satisfactorily answered. This thesis contributes to the literature on cooperation by investigating the endogenous choice of institutions with punishment and reward mechanisms, and by exploring their effects on cooperative behavior in social dilemma situations

Social learning increases the acceptance and the efficiency of punishment institutions in social dilemmas

Endogenously chosen punishment institutions perform well in increasing contributions and long-term payoffs in social dilemma situations. However, they suffer from (a) initial reluctance of subjects to join the punishment institution and (b) initial efficiency losses due to frequent punishment. Here, we investigate the effects of social learning on the acceptence and the efficiency of a peer punishment institution in a community choice experiment. Subjects choose between communities with and without the possibility to punish peers before interacting in a repeated social dilemma situation. We find that providing participants with a social history - presenting the main results of an identical previous experiment conducted with dierent subjects - decreases the initial reluctance towards the punishment institution signicantly. Moreover, with social history, cooperative groups reach the social optimum more rapidly and there is lower efficiency loss due to reduced punishment. Our findings shed light on the importance of social learning for the acceptance of seemingly unpopular but socially desirable mechanisms

Social learning increases the acceptance and the efficiency of punishment institutions in social dilemmas

Endogenously chosen punishment institutions perform well in increasing contributions and long-term payoffs in social dilemma situations. However, they suffer from (a) initial reluctance of subjects to join the punishment institution and (b) initial efficiency losses due to frequent punishment. Here, we investigate the effects of social learning on the acceptence and the efficiency of a peer punishment institution in a community choice experiment. Subjects choose between communities with and without the possibility to punish peers before interacting in a repeated social dilemma situation. We find that providing participants with a social history - presenting the main results of an identical previous experiment conducted with dierent subjects - decreases the initial reluctance towards the punishment institution signicantly. Moreover, with social history, cooperative groups reach the social optimum more rapidly and there is lower efficiency loss due to reduced punishment. Our findings shed light on the importance of social learning for the acceptance of seemingly unpopular but socially desirable mechanisms

Social learning increases the acceptance and the efficiency of punishment institutions in social dilemmas

Endogenously chosen punishment institutions perform well in increasing contributions and long-term payoffs in social dilemma situations. However, they suffer from (a) initial reluctance of subjects to join the punishment institution and (b) initial efficiency losses due to frequent punishment. Here, we investigate the effects of social learning on the acceptence and the efficiency of a peer punishment institution in a community choice experiment. Subjects choose between communities with and without the possibility to punish peers before interacting in a repeated social dilemma situation. We find that providing participants with a social history - presenting the main results of an identical previous experiment conducted with dierent subjects - decreases the initial reluctance towards the punishment institution signicantly. Moreover, with social history, cooperative groups reach the social optimum more rapidly and there is lower efficiency loss due to reduced punishment. Our findings shed light on the importance of social learning for the acceptance of seemingly unpopular but socially desirable mechanisms

The Effect of Payoff Tables on Experimental Oligopoly Behavior

We explore the effects of the provision of an information-processing instrument - payoff tables - on behavior in experimental oligopolies. In one experimental setting, subjects have access to payoff tables whereas in the other setting they have not. It turns out that this minor variation in presentation has non-negligible effects on participants' behavior, particularly in the initial phase of the experiment. In the presence of payoff tables, subjects tend to be more cooperative. As a consequence, collusive behavior is more likely and quickly to occur

Leadership with Individual Rewards and Punishments: Do Incentives Reinforce Leading by Example?

Leading by example is considered as an important means to influence followers and to increase team performance. In most organizations, however, leading by example does not come alone. To influence followers, leaders simultaneously use a variety of instruments. Most frequently, leaders possess power to administer positive and negative incentives to followers. Do these incentives reinforce the impact of leading by example on team performance? Because of confounding factors, it is difficult to investigate leading by example using field data. Here, we investigate the effects of leading by example and its interaction with incentives on team performance in controlled laboratory experiments. We find that incentives are more effective in fostering team performance than leading by example as such. Surprisingly, leading by example’s effect on team performance interacts negatively with incentives, interestingly more so with rewards than with punishments

The effects of punishment in dynamic public-good games

Considerable experimental evidence shows that although costly peer-punishment enhances cooperation in repeated public-good games, heavy punishment in early rounds leads to average period payoffs below the non-cooperative equilibrium benchmark. In an environment where past payoffs determine present contribution capabilities, this could be devastating. Groups could fall prey to a poverty trap or, to avoid this, abstain from punishment altogether. We show that neither is the case generally. By continuously contributing larger fractions of their wealth, groups with punishment possibilities exhibit increasing wealth increments, while increments fall when punishment possibilities are absent. Nonetheless, single groups do succumb to the above-mentioned hazards