Constructing Social Division to Support Cooperation

Many societies are divided into multiple smaller groups. Certain kinds of interaction are more likely to take place within a group than across groups. I model a reputation effect that enforces these divisions. Agents who interact with members of different groups can support lower levels of cooperation with members of their own groups. A hierarchical relationship between groups appears endogenously in equilibrium. Group divisions appear without any external cause, and improvements in formal contracting institutions may cause group divisions to disappear. Qualitative evidence from the anthropological literature is consistent with several predictions of the model.


Issue Date:
Feb 02 2016
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/269582
Language:
English
Total Pages:
34
JEL Codes:
C73; O12; O17
Series Statement:
WERP 1113




 Record created 2018-03-19, last modified 2020-10-28

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