The survival of inefficient and efficient norms: Equilibria with and without meta-norms in a repeated norm enforcing game

ABSTRACT

Although meta-norms have been considered as the key to sustaining cooperation norms, this study argues that the meta-norms also facilitate the survival of inefficient norms. The opportunistic norm violation strategy is proposed as an alternative mechanism to motivate costly punishments. A repeated norm enforcing game, in which the externality of the normative action can be negative or positive, is analyzed. This game is equivalent to a social dilemma if the externality is large enough. The ranges of externalities that support tit-for-tat, meta-norm, and opportunism equilibria are compared. The meta-norm equilibrium has the highest stability; however, it can persist in negative externalities. Finally, the opportunism equilibrium is more stable than the tit-for-tat equilibrium, but it breaks down when the externality is small.

KEYWORDS:

• Meta-norm
• inefficient norm
• costly punishment
• social dilemma
• repeated game

Notes

¹ Hechter and Opp (2001) summarize this approach and compare it with other perspectives.

² See Coleman (1990:260–62) for the definition of efficient norms in homogenous and heterogeneous societies.

³ The two artilces established similar theorems independently.

⁴ This game is equivalent to a social dilemma with two players.

⁵ Both strategies react to minimax behavior in the period following a deviation. The difference lies in the length of the severest punishment. In the MN strategy, it is just one period, but the folk theorems press for more periods.

⁶ Thus means player i punishes herself, as discussed in the conclusion.