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Sustaining cooperation : community enforcement vs. specialized enforcement

Author: Daron Acemoglu; Alexander Wolitzky; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2015.
Series: Working paper series (National Bureau of Economic Research), no. 21457.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
We introduce the possibility of direct punishment by specialized enforcers into a model of community enforcement. Specialized enforcers need to be given incentives to carry out costly punishments. Our main result shows that, when the specialized enforcement technology is sufficiently effective, cooperation is best sustained by a "single enforcer punishment equilibrium," where any deviation by a regular agent is  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Daron Acemoglu; Alexander Wolitzky; National Bureau of Economic Research,
OCLC Number: 919628383
Notes: "August 2015"
Description: 1 online resource (49 pages).
Series Title: Working paper series (National Bureau of Economic Research), no. 21457.
Responsibility: Daron Acemoglu, Alexander Wolitzky.

Abstract:

We introduce the possibility of direct punishment by specialized enforcers into a model of community enforcement. Specialized enforcers need to be given incentives to carry out costly punishments. Our main result shows that, when the specialized enforcement technology is sufficiently effective, cooperation is best sustained by a "single enforcer punishment equilibrium," where any deviation by a regular agent is punished only once, and only by enforcers. In contrast, enforcers themselves are disciplined (at least in part) by community enforcement. The reason why there is no community enforcement following deviations by regular agent is that such actions, by reducing future cooperation, would decrease the amount of punishment that enforcers are willing to impose on deviators. Conversely, when the specialized enforcement technology is ineffective, optimal equilibria do punish deviations by regular agents with community enforcement. The model thus predicts that societies with more advanced enforcement technologies should rely on specialized enforcement, while less technologically advanced societies should rely on community enforcement. Our results hold both under perfect monitoring of actions and under various types of private monitoring.

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