Institutions influence preferences: Evidence from a common pool resource experiment

• DOI: 10.1016/j.jebo.2007.06.004
• Publication Date: 2007-06-26T07:18:15Z
• Authors: Carlos Rodriguez-...; Ricardo Andrés Gu...; Juan Camilo Cárdenas
• Keywords: Common-pool resource; Reciprocal; Deterrence

We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting our model to experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion. Low fines stabilize cooperation by preventing a spiral of negative reciprocation.