"Norm Enforcement with Incomplete Information"

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We study the emergence of norms and their enforcement in a public goods game with private information about endowments. Subjects were randomly assigned a Low or High endowment and across treatments endowments were either Observed or Unobserved. We estimate contribution norms and then estimate the expected costs of noncompliance. We find that incomplete information does not affect norms, but rather their enforcement. In both Observed and Unobserved we see a “contribute-your-endowment” norm emerge. Enforcement in Observed is close to theoretic predictions. However, enforcement in Unobserved depended on how well subjects could map contributions to endowments in a given round. When at least one High type pooled with Low types (by contributing less than or equal to the Low endowment), punishment was used to protect Low rather than attack High: contributions equal to the Low endowment were not punished (in case they came from a cooperative Low type) while contributions of zero were punished as if they were from a High type. This kept cooperation from unraveling, but it also enabled High types to hide behind small endowments. Our results dovetail with results from bargaining games and suggest that in settings with incomplete information, norms emerge to attenuate rather than eliminate non-cooperative behavior.
Norms; Income Inequality; Incomplete Information; Cooperation; Punishment; Public Goods
"Norm Enforcement with Incomplete Information" by Lawrence R. De Geest Suffolk University David C. Kingsley University of Massachusetts Lowell