Reciprocity as a Contract Enforcement Device: Experimental Evidence

Fehr, Ernst; Gächter, Simon; Kirchsteiger, Georg

doi:10.2307/2171941

Cited by 1,035 publications

(622 citation statements)

References 16 publications

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“…Members of these castes are today called Dalits, a non-pejorative term that literally means "oppressed" or "ground down." 5 See Fehr et al (1997), who demonstrate that the willingness to punish shirkers strongly increases the gains from trade. Logan and Shah (2009) demonstrate in an illegal market-the male sex market-the power of informal policing to permit honest providers to signal their type.…”

mentioning

confidence: 99%

Caste and Punishment: The Legacy of Caste Culture in Norm Enforcement

Hoff¹,

Kshetramade²,

Fehr³

2009

PsycEXTRA Dataset

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Well-functioning groups enforce social norms that restrain opportunism. We study how the assignment to the top or bottom of the caste system affects the altruistic punishment of norm violations. Individuals at the bottom of the hierarchy exhibit a much lower willingness to punish norm violations that hurt members of their own caste. We can rule out self-selection into castes and control for wealth, education and political experience. We thus plausibly identify the impact of caste status on altruistic punishment. The lower willingness to punish may impair the low castes' ability to enforce contracts, to ensure property rights and sustain cooperation.

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confidence: 99%

Caste and Punishment: The Legacy of Caste Culture in Norm Enforcement

Hoff¹,

Kshetramade²,

Fehr³

2009

PsycEXTRA Dataset

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“…7 As in Fehr et al (1997), we consider a very competitive market of services supplied by numerous agents. This allows principals to have strong bargaining power and o¤er contracts with expected zero rents for the agents.…”

Section: The Modelmentioning

confidence: 99%

“…2 See, for instance, the experimental work of Fehr et al (1997), in which social preferences, if able to be disclosed, produce e¢ ciency gains and increase the size and extent of trade. 1 tract and the enforcement costs in courts (Boehm, 2013;Cappelen et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

Binding and Non-Binding Contracts: A Theoretical Appraisal

D’Agostino

Lisciandra

2017

Review of Law &Amp; Economics

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In a fully self-enforcing environment, individuals can execute market transactions exclusively on the basis of trust. However, the presence of individuals showing self-regarding preferences causes serious impediments to the development and even the existence of market transactions. An enforcing legal system helps to control for the lack of trust existing in every modern society. The article provides a theoretical investigation accompanied by a numerical simulation of the impact of the introduction of a costly legal system that makes contracts binding. Therefore, it investigates the choice between legally binding contracts, which are costly to verify and enforce, and non-binding contracts, which simply rely on trust, in both one-shot and repeated interactions. We …nd that a legal system protecting property rights mainly produces bene…ts when e¤ort is particularly valuable. In the other circumstances, the bene…ts are marginal. A subset of parameters also exists in which the legal system is detrimental. This is especially the case of standardized production. Finally, reputation unleashes its welfare-enhancing properties when e¤ort is very valuable, otherwise the bene…ts are trivial.

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“…Online worlds can eliminate the threat of theft and many forms of scarcity, but without risk online communities will be dull and will not provide the possibility for the development of high levels of trust" 42 In this formalization, the cooperating individuals have payoff functions which could partially depend on how they behave but, of course, their survival only depends on the material component of the payoff. On this subject, apart from the pioneering work by Axelrod [1984], see the articles by Gintis [2002], Guttman [2000], Cox [2000] and the experiments by Fehr -Gächter [1997] and Henrich -Boyd et al [2001]. 43 This famous quotation is from An Enquiry to the Nature and Cause of the Wealth of Nations (1776) : "It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest.…”

Section: A Participation Pattern Less Cooperative Than Proactivementioning

confidence: 99%

Information goods and online communities

Gensollen

2007

Internet and Digital Economics

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Digitization and virtualisation of information goods gradually moves the value of these goods from their physical layer towards the social process which generates and prepares a demand that suits them best. At the same time, ICTs (Information and Communication Technologies) are currently challenging the top-down model that channels information from producers to final consumers through the massmedia system and the retail network. On the Internet, new structures of interaction between consumers (virtual communities) are already shaping efficient ways to initiate and develop the demand for information products. This paper presents three types of virtual communities which jointly play a significant role in the emergence of a bottom-up model: (a) file-sharing communities (like Napster), that challenge the top-down editorial model; (b) experience-sharing communities (like Amazon.com), that help consumers to estimate ex ante experience goods characteristics; these communities trigger the value migration from information to meta-information; (c) knowledge sharing communities (like free software user lists), that help consumers to understand complex goods and customize them to their needs ; these epistemic communities could lead information goods designers to better apprehend the consumers' usage constraints. Virtual communities are original interaction structures: they are characterized by very weak ties or even no interpersonal relations; they centre around an information corpus, built and used by anybody for his or her own sake. The survival of these communities does not depend mainly on the altruism of the participants but rather on the structure of the corpus (the file sharing utility, the reviews, the forum or the user list, etc.). As a regulation model for final markets, virtual communities could lead to a wider variety and a greater adaptability of final goods.Classification JEL : D12, L15, L82Information goods and online communities -Michel Gensollen

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Reciprocity as a Contract Enforcement Device: Experimental Evidence

Cited by 1,035 publications

References 16 publications

Caste and Punishment: The Legacy of Caste Culture in Norm Enforcement

Caste and Punishment: The Legacy of Caste Culture in Norm Enforcement

Binding and Non-Binding Contracts: A Theoretical Appraisal

Information goods and online communities

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