Cheating Because They Can: The Role of Networks in Informal Governance (LIEPP Policy Brief, n°62)

Jennifer Larson
Settlers flocking to “boomtowns” on the American western frontier were faced with the same task that communities in weak states across the globe face: self-governance. Peer sanctions can enforce cooperation in these environments, but their efficacy depends on the social networks that transmit information from peer to peer. Peripheral network positions can generate such strong incentives to misbehave that persistent cheating obtains in equilibrium. Groups maintaining high levels of cooperation that face shocks to their...
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