Enforcing social norms: Trust-building and community enforcement

Joyee Deb, Julio González-Díaz

    Research output: Contribution to journalArticlepeer-review


    We study impersonal exchange and ask how agents can behave honestly in anonymous transactions without contracts. We analyze repeated anonymous random matching games, where agents observe only their own transactions. Little is known about cooperation in this setting beyond the prisoner's dilemma. We show that cooperation can be sustained quite generally, using community enforcement and “trust-building.” The latter refers to an initial phase in which one community builds trust by not deviating despite a short-run incentive to cheat; the other community reciprocates trust by not punishing deviations during this phase. Trust-building is followed by cooperative play, sustained through community enforcement.

    Original languageEnglish (US)
    Pages (from-to)1387-1433
    Number of pages47
    JournalTheoretical Economics
    Issue number4
    StatePublished - Nov 1 2019


    • C72
    • C73
    • Community enforcement
    • D82
    • D83
    • anonymous random matching
    • contagion
    • repeated games

    ASJC Scopus subject areas

    • General Economics, Econometrics and Finance


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