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homogeneous and heterogeneous groups

Reuben and Riedl (2013) examine the enforcement of norms of contribution to public goods in homogeneous and heterogeneous groups, such as groups whose members vary in their endowment, contribution capacity, or marginal benefits. In particular, Reuben and Riedl are interested in the normative appeal of two potentially applicable rules: the efficiency rule (prescribing maximal contributions by all) and the class of relative contribution rules (prescribing a contribution that is “fair” relative to the contributions of others; e.g., equality and equity rules). Reuben and Riedl’s results show that, in the absence of punishment, no positive contribution norm emerged and all groups converged toward free-riding. By contrast, with punishment, contributions were consistent with the prescriptions of the efficiency rule in a significant subset of groups (irrespective of the type of group heterogeneity); in other groups, contributions were consistent with relative contribution rules. These results suggest that even in heterogeneous groups individuals can successfully enforce a contribution norm. Most notably, survey data involving third parties confirmed well-defined yet conflicting normative views about the aforementioned contribution rules; in other words, both efficiency and relative contribution rules are normatively appealing, and are indeed potential candidates for emerging contribution norms in different groups.

Bicchieri and Chavez (2010) designed an experiment to investigate norm compliance in ultimatum games. Specifically, their experiment involved a variant of the ultimatum game whereby the proposer could choose one of the following three options: ($5, $5)($8, $2), or Coin (in which case one of the other two allocations would be selected at random). This design allows for two plausible notions of fairness: as an equal outcome ($5, $5) or as a fair procedure (Coin). The experimenters elicited subjects’ normative expectations about the actions they thought would be considered fair by most participants: proposers and responders showed a remarkable degree of agreement in their notions of fairness, as most subjects believed that a majority of participants deemed both ($5, $5) and Coin to be appropriate. Further, the experimenters had subjects play three instances of the above ultimatum game under different information conditions. In the “full information” condition, all participants knew that the Coin option was available, and that responders would know if their respective proposer had chosen Coin. In the “private information” condition, responders did not know that Coin was available to proposers, and proposers were aware of responders’ ignorance. In the “limited information” condition, participants knew that the Coin option was available, but responders would not be able to distinguish whether their respective proposer had implemented one of the two allocations directly or had chosen Coin instead. The experimental results show that when normative expectations supporting the Coin option were either absent (in the private condition) or could be defied without consequence (in the limited condition), the frequency of choice of ($5, $5) and ($8, $2), respectively, were considerably higher than those of Coin. Moreover, the frequency of Coin choices was highest in the public information condition, where such option was common knowledge and its outcome transparent: this shows that there proposers followed the rule of behavior that favored them most, and that such a rule was effectively a social norm. On the other hand, substantial norm evasion characterized proposers’ behavior in the limited information condition, where ($8, $2) was the most frequent choice.

In a subsequent study, Chavez and Bicchieri (2013) measured empirical and normative expectations (as well as behavior) of third parties who were given the opportunity to add to or deduct from the payoffs of subjects who had participated in an ultimatum game. Third parties tended to reward subjects involved in equal allocations and to compensate victims of unfair allocations (rather than punish unfair behavior); on the other hand, third parties were willing to punish when compensation was not an available option. The experimental results further show that third parties shared a notion of fairness (as indicated by their normative expectations), and that such notion was sensitive to contextual differences.