We investigate the endogenous formation of sanctioning institutions supposed to improve efficiency in the voluntary provision of public goods. Our paper parallels Markussen et al. (Rev Econ Stud 81:301–324, 2014) in that our experimental subjects vote over formal versus informal sanctions, but it goes beyond that paper by endogenizing the formal sanction scheme. We find that self-determined formal sanctions schemes are popular and efficient when they carry no up-front cost, but as in Markussen et al. informal sanctions are more popular and efficient than formal sanctions when adopting the latter entails such a cost. Practice improves the performance of sanction schemes: they become more targeted and deterrent with learning. Voters’ characteristics, including their tendency to engage in perverse informal sanctioning, help to predict individual voting.

Punishment has been shown to be an effective reinforcement mechanism. Intentional or not, punishment will likely generate spillover effects that extend beyond one’s immediate decision environment, and these spillovers are not as well understood. We seek to understand these secondary spillover effects in a controlled lab setting using a standard social dilemma: the voluntary contributions mechanism. We find that spillovers occur when others observe punishment outside their own social dilemma. However, the direction of the spillover effect depends crucially on personal punishment history and whether one is personally exempt from punishment or not.

Leadership mechanisms provide a potential means to mitigate social dilemmas, but empirical evidence on the success of such mechanisms is mixed. In this paper, we explore the institutional frame as a relevant factor for the effectiveness of leadership. We compare subjects’ behavior in public-goods experiments that are either framed positively (give-some game) or negatively (take-some game). We observe that leader and follower decisions are sensitive to the institutional frame. Leaders contribute less in the take-some game, and the correlation between leaders’ and followers’ contribution is weaker in the take-some game. Additionally, using a strategy method to elicit followers’ reactions at the individual level, we find evidence for the malleability of followers’ revealed cooperation types. Taken together, the leadership institution is found to be less efficient in the take- than in the give-frame, both in games that are played only once and repeatedly.

The paper examines whether an institution has a differing impact on cooperation if it is introduced by a representative of the affected subjects rather than exogenously imposed. The experimental design controls for selection effects arising from the endogenous policy choice. The treatment varies whether the decision-maker is elected or randomly appointed. There is evidence of a large democracy premium in the sense that endogenously chosen institutions lead to more cooperation than identical exogenous institutions, but only if the group leader is democratically chosen. Especially the subjects who initially did not prefer the policy are more likely to cooperate if it was brought about by an elected representative. There is no democracy premium for randomly appointed group leaders.

Gallice and Monzón (Econ J 129(621):2137–2154, 2019) present present a natural environment that sustains full co-operation in one-shot social dilemmas among a finite number of self-interested agents. They demonstrate that in a sequential public goods game, where agents lack knowledge of their position in the sequence but can observe some predecessors’ actions, full contribution emerges in equilibrium due to agents’ incentive to induce potential successors to follow suit. In this study, we aim to test the theoretical predictions of this model through an economic experiment. We conducted three treatments, varying the amount of information about past actions that a subject can observe, as well as their positional awareness. Through rigorous structural econometric analysis, we found that approximately 25% of the subjects behaved in line with the theoretical predictions. However, we also observed the presence of alternative behavioural types among the remaining subjects. The majority were classified as conditional co-operators, showing a willingness to cooperate based on others’ actions. Some subjects exhibited altruistic tendencies, while only a small minority engaged in free-riding behaviour.

Ostracism, or exclusion by peers, has been practiced since ancient times as a severe form of punishment against transgressors of laws or social norms. The purpose of this paper is to offer a comprehensive analysis on how ostracism affects behavior and the functioning of a social group. We present data from a laboratory experiment, in which participants face a social dilemma on how to allocate limited resources between a productive activity and theft, and are given the opportunity to exclude members of their group by means of majority voting. Our main treatment features an environment with heterogeneity in productivity within groups, thus creating inequalities in economic opportunities and income. We find that exclusion is an effective form of punishment and decreases theft by excluded members once they are re-admitted into the group. However, it also leads to some retaliation by low-productivity members. A particularly worrisome aspect of exclusion is that punished group members are stigmatized and have a higher probability of facing exclusion again. We discuss implications of our findings for penal systems and their capacity to rehabilitate prisoners.

Using an appropriation game setting, we examine individual responses to changes in a groups’ vulnerability to a probabilistic loss (L) of a public good. The probabilistic loss parameter entails losing 10, 50 or 90% of the value of the public good that is maintained through cooperation, where the likelihood of the loss decreases in total group cooperation. By design, the expected marginal net benefits to an individual and the expected harm to others depends endogenously on the individuals’ expectations of group cooperation and exogenously on the magnitude of the loss parameter. We find that individual cooperation is greater when forecasts of total group cooperation are greater and where the magnitude of the probabilistic loss is larger. There is, however, an interesting asymmetry in responses by two subgroups. Subjects who are pessimistic regarding total group cooperation decrease cooperation the higher the magnitude of the probabilistic loss and their decisions are tied systematically to changes in their expectations of other’s cooperation. On the other hand, subjects who are optimistic regarding total group cooperation are found to be more cooperative, but their decisions are not systematically tied to changes in expectations of others’ cooperation.

To investigate the impact of framing on rule-breaking in social dilemmas, we incorporated a rule in a 1-shot resource game with 2 framing treatments: in one frame, we offered a give-some dilemma (i.e., a variant of a public goods game), and in the other frame, a take-some dilemma (i.e., a variant of a commons dilemma game). In each frame, all participants were part of 1 single collective sharing a common good. Each participant was initially equipped with 1 of 5 different endowments of points from which they must give/were allowed to take amounts to/from the common good. The rule established outcome equality between participants by prescribing the exact amounts of what to give/take to/from the common good, which was finally divided equally among participants. Participants decided whether to cooperate and comply with the rule or to break the rule to their own advantage and to the detriment of the collective (i.e., giving lower/taking higher amounts). The results of an online experiment with 202 participants showed a significantly higher proportion of individuals breaking the rule in the take-some dilemma than in the give-some dilemma. In addition, endowment size influenced the proportion of rule-breaking behavior in the take-some dilemma. However, the average amounts of points not given/taken too much were not different between the 2 dilemma types.

Supervisory mentoring represents a type of social dilemma called a delayed social fence. This study adopts a social dilemma perspective to examine how the three types of psychological contracts (balanced, relational, and transactional) perceived by supervisors differently influence their mentoring. Drawn on social dilemma perspective, we proposed that supervisory mentoring would be more likely to occur when supervisors perceived benefit return from their mentoring provision in a timely manner. The results obtained from a sample of 596 supervisor–subordinate matched data from the self-reported questionnaires completed by 225 sales agent teams in the insurance industry in Taiwan support our predictions. Consistent with the social dilemma perspective, supervisory mentoring is more likely among subordinates whose supervisors perceived balanced psychological contract, while supervisory mentoring is less likely among subordinates whose supervisors perceived transactional psychological contract. Furthermore, we found that supervisory mentoring is positively related to subordinate performance. Our mentor-centric multilevel framework helps identify the social dilemma nature underlying mentoring provision, and verify the positive influence of mentoring on protégé performance.

Are groups of people better able to minimize a collective loss if there is a collective target that must be reached or if every small contribution helps? In this paper we investigate whether cooperation in social dilemmas can be increased by structuring the problem as a step-level social dilemma rather than a linear social dilemma and whether cooperation can be increased by manipulating endowment asymmetry between individuals. In two laboratory experiments using ‘Public Bad’ games, we found that that individuals defect less and are better able to minimize collective and personal costs in a step-level social dilemma than in a linear social dilemma. We found that the level of cooperation is not affected by an ambiguous threshold: even when participants cannot be sure about the optimal cooperation level, cooperation remains high in the step-level social dilemmas. We find mixed results for the effect of asymmetry on cooperation. These results imply that presenting social dilemmas as step-level games and reducing asymmetry can help solve environmental dilemmas in the long term.

We used psychological methods to investigate how two prominent interventions, participatory decision making and enforcement, influence voluntary cooperation in a common-pool resource dilemma. Groups (N=40) harvested resources from a shared resource pool. Individuals in the Voted-Enforce condition voted on conservation rules and could use economic sanctions to enforce them. In other conditions, individuals could not vote (Imposed-Enforce condition), lacked enforcement (Voted condition), or both (Imposed condition). Cooperation was strongest in the Voted-Enforce condition (Phase 2). Moreover, these groups continued to cooperate voluntarily after enforcement was removed later in the experiment. Cooperation was weakest in the Imposed-Enforce condition and degraded after enforcement ceased. Thus, enforcement improved voluntary cooperation only when individuals voted. Perceptions of procedural justice, self-determination, and security were highest in the Voted-Enforced condition. These factors (legitimacy, security) increased voluntary cooperation by promoting rule acceptance and internalized motivation. Voted-Enforce participants also felt closer to one another (i.e., self-other merging), further contributing to their cooperation. Neither voting nor enforcement produced these sustained psychological conditions alone. Voting lacked security without enforcement (Voted condition), so the individuals who disliked the rule (i.e., the losing voters) pillaged the resource. Enforcement lacked legitimacy without voting (Imposed-Enforce condition), so it crowded out internal reasons for cooperation. Governance interventions should carefully promote security without stifling fundamental needs (e.g., procedural justice) or undermining internal motives for cooperation.

Kieslich and Hilbig (2014) employ a mouse-tracking technique to measure decision conflict in social dilemmas. They report that defectors exhibit more conflict than do cooperators. They infer that cooperation thus is the reflexive, default behavior. We argue, however, that their analysis fails to discriminate between reflexive versus cognitively controlled behavioral responses. This is because cognitive conflict can emanate from resisting impulse successfully—or unsuccessfully.

Recently, it has been suggested that people are spontaneously inclined to cooperate in social dilemmas, whereas defection requires effortful deliberation. From this assumption, we derive that defection should entail more cognitive conflict than cooperation. To test this hypothesis, the current study presents a first application of the response dynamics paradigm (i.e., mouse-tracking) to social dilemmas. In a fully incentivized lab experiment, mouse movements were tracked while participants played simple two-person social dilemma games with two options (cooperation and defection). Building on previous research, curvature of mouse movements was taken as an indicator of cognitive conflict. In line with the hypothesis of less cognitive conflict in cooperation, response trajectories were more curved (towards the non-chosen option) when individuals defected than when they cooperated. In other words, the cooperative option exerted more “pull” on mouse movements in case of defection than the non-cooperative option (defection) did in case of cooperation. This effect was robust across different types of social dilemmas and occurred even in the prisoner’s dilemma, where defection was predominant on the choice level. Additionally, the effect was stronger for dispositional cooperators as measured by the Honesty-Humility factor of the HEXACO personality model. As such, variation in the effect across individuals could be accounted for through cooperativeness.

Myrseth and Wollbrant (2015) offer an alternative theoretical explanation for our finding that defection entails more cognitive conflict than cooperation (Kieslich & Hilbig, 2014). Although we completely agree that different theoretical explanations for a result are possible, we maintain that the theoretical approach we tested (Rand et al., 2014) is parsimonious and falsifiable, excluding certain plausible results a priori. By comparison, the alternative framework proposed by Myrseth and Wollbrant requires several debatable assumptions to account for our findings, rendering it the more complex theory. Besides, their framework as a whole could have accounted for any possible finding in our experiment, making it impossible to falsify it with our data. We thus conclude that the notion by Rand et al.—that there is a spontaneous disposition to cooperate—has more empirical content while requiring fewer assumptions.

Microfinance is an economic development tool that provides loans to low-income borrowers to stimulate economic growth and reduce financial hardship. Lenders typically require joint liability, where multiple borrowers share the responsibility of repaying a group loan. We propose that this lending practice creates a cooperation dilemma similar to that faced by humans and other organisms in nature across many domains. This could offer a real-world test case for evolutionary theories of cooperation from the biological sciences. In turn, such theories could provide new insights into loan repayment behaviour. We first hypothesise how group loan repayment efficacy should be affected by mechanisms of assortment from the evolutionary literature on cooperation, i.e. common ancestry (kin selection), prior interaction (reciprocity), partner choice, similarity of tags, social learning, and ecology and demography. We then assess selected hypotheses by reviewing 41 studies from 32 countries on micro-borrowers’ loan repayment, evaluating which characteristics of borrowers are associated with credit repayment behaviour. Surprisingly, we find that kinship is mostly negatively associated with repayment efficacy, but prior interaction and partner choice are both more positively associated. Our work highlights the scope of evolutionary theory to provide systematic insight into how humans respond to novel economic institutions and interventions.

Individuals benefit from maintaining the well-being of their social groups and helping their groups to survive threats such as intergroup competition, harsh environments and epidemics. Correspondingly, much research shows that groups cooperate more when competing against other groups. However, ‘social’ threats (i.e. outgroups) should elicit stronger cooperation than ‘asocial’ threats (e.g. environments, diseases) because (a) social losses involve a competitor's gain and (b) a strong cooperative reaction to defend the group may deter future outgroup threats. We tested this prediction in a multiround public goods game where groups faced periodic risks of failure (i.e. loss of earnings) which could be overcome by sufficient cooperation. This threat of failure was framed as either a social threat (intergroup competition) or an asocial threat (harsh environment). We find that cooperation was higher in response to social threats than asocial threats. We also examined participants’ willingness to manipulate apparent threats to the group: participants raised the perceived threat level similarly for social and asocial threats, but high-ranking participants increased the appearance of social threats more than low-ranking participants did. These results show that people treat social threats differently than asocial threats, and support previous work on leaders’ willingness to manipulate perceived threats.

The scholarly discourse on social norms in the tradition of Thomas Schelling (1960) often makes a sharp distinction between social norms and social conventions. In attempting to apply that distinction to actual practices and to teach it to practitioners and students I encountered frequent difficulties and confusions, and finally concluded that it is untenable. I recommend a return to some version of Ullman-Margalit’s (1977) distinction between social norms of cooperation and social norms of coordination. Social norms, I say, are distinguished by beliefs in a relevant group that the rule is typical among them and approved of among them. I describe four ways that social norms of coordination, including conventions of social meaning, are influenced by social approval and disapproval. I contend that the effort by Southwood and Eriksson (2011) to show that social conventions and social norms are essentially different breaks down because their conception of social norms is overly moralized. I present a more social conception of social norms that does without the regnant distinction between “social norm” and “social convention” and instead allows for social norms of cooperation, social norms of coordination, and other kinds of social norms.

Recent research suggests that employees perceive organizational citizenship behaviour (OCB) as costly while OCB in the aggregate benefits organizations. Employees thus face an OCB dilemma. This study adopts the social dilemma perspective, proposing that employee OCB varies with the three types of psychological contracts (e.g., relational, balanced, and transactional) due to different degrees of perceived social dilemma and explains why employees engage in OCB in the context of varying levels of social dilemmas. We used moderated structural equation modelling to test the mediating and moderating hypotheses using data from 485 supervisor-subordinate dyads from 58 companies in a variety of industries in Taiwan. As predicted, results suggest that employee OCB has the strongest relationship with balanced psychological contract. Results also confirm the mediating role of felt obligations in both relational and balanced psychological contracts and the moderating role of empathie concerns in transactional psychological contract. We discuss the theoretical and practical implications of these results.