Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs

Florian Engl, Arno Riedl and Roberto Weber

No 6504, CESifo Working Paper Series from CESifo

Abstract: Institutions are an important means for fostering prosocial behaviors, but in many contexts their scope is limited and they govern only a subset of all socially desirable acts. We study experimentally how the presence and nature of an institution that enforces prosocial behavior in one domain affects behavior in a similar but unregulated domain. Groups play two identical public good games, with cooperation institutionally enforced in one game. The presence of an institution in one game generally enhances cooperation in the other game, thus documenting a positive spillover effect. These indirect spillover effects are economically substantial, amounting up to 30 to 40 percent of the direct effect of institutions. In addition, we find evidence for sequential spillover effects, meaning that behavior is affected by the institution even after it is removed. We also observe that institutions enhance prosocial preferences and beliefs about others’ prosocial behavior, even toward strangers, suggesting that both factors are drivers of the observed spillover effects. We further explore other aspects influencing spillover effects, including characteristics of an institution, such as whether it is exogenously imposed or endogenously determined.

Keywords: public goods; institutions; spillover effect; social preferences; beliefs (search for similar items in EconPapers)
JEL-codes: C92 D02 D72 H41 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ban, nep-cbe, nep-cdm, nep-cta, nep-exp, nep-gth and nep-soc
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Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs (2021)
Working Paper: Spillover Effects of Institutions on Cooperative Behavior, Preferences and Beliefs (2017)
Working Paper: Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6504

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