@article{80bbaa6c36284c53af6996f480b04255,
title = "Normative conflict and the limits of self-governance in heterogeneous populations",
abstract = "Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality – a normative conflict – which is overlooked. Agents{\textquoteright} concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism allowing individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no conflict between efficiency and equality – the mechanism permits groups to obtain maximum efficiency. This is not the case in heterogeneous populations despite the fact that individuals could use rewards to resolve the normative conflict. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest normative conflict can be difficult to overcome, imposing limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.",
keywords = "Communication, Cooperation, Heterogeneity, Normative conflict, Rewards",
author = "Lata Gangadharan and Nikos Nikiforakis and Villeval, {Marie Claire}",
note = "Funding Information: The paper was previously circulated under the title “Equality concerns and the limits of self-governance in heterogeneous populations”. We are grateful to R. Cautain and Q. Th{\'e}venet for programming the experiment, to Z. Dai, J. Benistant and R. Suchon for valuable research assistance, and to the editor and reviewers for valuable comments. We also thank A. Cappelen, D. Cooper, E. Fatas, H. Orzen, B. Tungodden, R. Zultan and participants at the “Social Norms and Institutions” conference in Ascona, the workshop on “Cooperation, Cultural Aspects and Norms” at the Hebrew University of Jerusalem, the Workshop on “Behavioral Public Economics” in Mannheim, the Florida State University Entrepreneurship Experimental Workshop in Tampa, the North-American ESA conference in Dallas, the Workshop on Social Norms and Moral Norms in Lyon, the ASFEE conference in Paris, the AFSE conference in Rennes, and in seminars at the ChoiceLab in Bergen, Beijing Normal University, University of East Anglia, New York University Abu Dhabi, University of Nice, Queensland University of Technology, Shandong University, the University of Fribourg, the University of Lausanne, Texas A&M, Hong Kong University of Science and Technology, Hitotsubashi University, Kochi University of Technology, Monash University and Tsinghua University for useful comments. This research has been supported by a grant of the French National Research Agency (ANR, EMCO program, HEIDI grant, ANR-11-EMCO-011-01 ) and funding from the Australian Cooperative Research Centre for Water Sensitive Cities (CRC grant number 20110044). It was performed within the framework of the LABEX CORTEX (ANR-11-LABX-0042) of Universit{\'e} de Lyon, within the program Investissements d'Avenir (ANR-11-IDEX-007) operated by the French National Research Agency. Publisher Copyright: {\textcopyright} 2017 Elsevier B.V.",
year = "2017",
month = nov,
doi = "10.1016/j.euroecorev.2017.07.013",
language = "English (US)",
volume = "100",
pages = "143--156",
journal = "European Economic Review",
issn = "0014-2921",
publisher = "Elsevier",
}