PEW: Matt Jackson

Mon, Sep 16, 2019, 4:15 pm to 5:30 pm

We investigate the complementarity between informal communities and formal government enforcement of norms of reciprocation and exchange. We introduce a model in which people exchange informally within their community as well as externally on a market. We show that informal community and formal enforcement are complements: the news that someone was convicted of cheating on the market leads that person to be ostracized by their community, bolstering incentives. Although transactions within a community can be less directly beneficial than those on a wider market, doing some transactions within a community and others on a formal market lowers overall costs of enforcement and is still welfare-enhancing compared to either extreme for a wide range of costs of formal enforcement. We also show that religion can enhance the complementarity between community and formal enforcement, while corruption undermines it



Princeton/Warwick/Utah Political Economy Conference 2020

Thu, Jul 2, 2020, 9:00 am to Fri, Jul 3, 2020, 7:00 pm
Location: Rome, Italy

PEW: Jeff Ely

Mon, Apr 12, 2021, 4:15 pm to 5:30 pm
Location: 101 JRR