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Some philosophers and social scientists have stressed the importance for good government of an altruistic citizenry that values the well being of one another. Others have emphasized the need for incentives that induce even the self interested to contribute to the public good. Implicitly most have assumed that these two approaches are complementary or at worst additive. But this need not be the case. Behavioral experiments find that if reciprocity-minded subjects feel hostility towards free riders and enjoy inflicting harm on them, near efficient levels of contributions to a public good may be supported when group members have opportunities to punish low contributors. Cooperation may also be supported if individuals are sufficiently altruistic that they internalize the group benefits that their contributions produce. Using a utility function embodying both reciprocity and altruism we show that unconditional altruism towards other members attenuates the punishment motive and thus may reduce the level of punishment inflicted on defectors, resulting in lower rather than higher levels of contributions. Increases in altruism may also reduce the level of benefits from the public project net of contribution costs and punishment costs. The negative effect of altruism on cooperation and material payoffs is greater the stronger is the reciprocity motive among the members.

This paper presents a model of legal migration from one source country to two host countries, both of which can control their levels of immigration. Because of complementarities between capital and labor, the return on capital is positively related to the level of immigration. Consequently, when capital is immobile, host nations' optimal levels of immigration are positively related to their capital endowments. Further, when capital is mobile between the two host nations, the common return on capital is a function of the levels of immigration in both countries, meaning that immigration is a public good. As a result, when immigration imposes costs on host countries, the Nash equilibrium results in free riding and less immigration than would occur in the cooperative equilibrium. These results are qualitatively unaltered when capital mobility extends to the source nation.

Der folgende Beitrag befasst sich mit umweltbezogenen Selbstverpflichtungen als eine Variante von Kooperations- oder Verhandlungslösungen. Selbstverpflichtungen werden als neues Instrument in der Umweltpolitik diskutiert, um flexibel und günstig Umweltprobleme zu lösen. Bei umweltbezogenen Selbstverpflichtungen verhandeln Firmen oder Industrieverbände und der Staat und vereinbaren Umweltschutzmaßnahmen, die die Firmen zu erfüllen haben. Vertreter der Industrie schreiben dem Instrument der Selbstverpflichtungen ein hohes Maß an ökologischer Effektivität und ökonomischer Effizienz zu. Die Industrie befürwortet Selbstverpflichtungen um andere umweltpolitische Instrumente des Staates zu verhindern und um dadurch einen größeren Handlungsspielraum zu gewinnen. Deshalb werden Selbstverpflichtungen als Alternative zu anderen umweltpolitischen Instrumenten diskutiert. Im Ergebnis bieten umweltbezogene Selbstverpflichtungen keine Vorteile gegenüber anderen Instrumenten der Umweltpolitik: Das Problem des Freifahrerverhaltens und einer meist ungeregelten Verteilung der Vermeidungslasten zwischen den verpflichteten Firmen führen zu einer geringen ökologischen Effektivität und zur ökonomischen Ineffizienz. Die Kombination einer Selbstverpflichtungen mit einer Zertifikats- oder Abgabenlösungen zu einem ?Policy-Mix? können das Freifahrerverhalten verhindern und Ineffizienzen vermeiden. Dies würde aber zum Anstieg des administrativen Aufwands, zum Verlust an Flexibilität und Zeit führen. ; The following paper discusses environmental agreements as a variant of cooperative or negotiated approaches. Environmental agreements are increasingly discussed as a new policy instrument to deal with environmental problems in a flexible manner at low cost. Environmental agreements are negotiated commitments from firms or industrial associations with the government to improve their environmental performance. Agents of the industry impute environmental agreements as an instrument of environmental policy a high level of environmental effectiveness and economic efficiency. Polluting industries make use of an environmental agreement in order to prevent government intervention by other instruments. Thereby they suppose to have a greater degree of freedom to act. That is the reason why environmental agreements are discussed as an alternative to other instruments of environmental policy. The result of this paper is that environmental agreements offer no advantages in comparison to other instruments of environmental policy: The problem of free-riding and the mostly unregulated abatement effort among the firms lead to low environmental effectiveness and economic inefficiency. Combining an environmental agreement with a tradable permit system or a tax in a ?policy mix? can limit free-riding and inefficiency. It may lead to increasing administrative costs, lost flexibility and no time saving in implementation.

Many international treaties come into force only after a minimum number of countries have signed and ratified the treaty. Why do countries agree to introduce a minimum participation constraint among the rules characterising an international treaty? This question is particularly relevant in the case of environmental treaties dealing with global commons, where free-riding incentives are strong. Is a minimum participation rule a way to offset these free-riding incentives? Why do countries that know they have an incentive to free-ride accept to "tie their hands" through the introduction of a minimum participation constraint? This paper addresses the above questions by analysing a three-stage non-cooperative coalition formation game. In the first stage, countries set the minimum coalition size that is necessary for the treaty to come into force. In the second stage, countries decide whether to sign the treaty. In the third stage, the equilibrium values of the decision variables are set. At the equilibrium, both the minimum participation constraint and the number of signatories – the coalition size – are determined. This paper shows that a non-trivial partial coalition, sustained by a binding minimum participation constraint, forms at the equilibrium. This paper thus explains why in international negotiations all countries often agree on a minimum participation rule even when some of them do not intend to sign the treaty. The paper also analyses the optimal size of the minimum participation constraint.

Costly signaling of commitment to a group has been proposed as an explanation for participation in religion and ritual. But if the signal's cost is too small, freeriders will send the signal and behave selfishly later. Effective signaling may then be prohibitively costly. If the average level of signaling in a group is observable, but individual effort is not, then freeriders can behave selfishly without being detected, and group members will learn about the average level of commitment among the group. We develop a formal model, and give examples of institutions that enable anonymous signaling, including ritual, religion, music and dance, voting, charitable donations, and military institutions. We explore the value of anonymity in the laboratory with a repeated two-stage public goods game with exclusion. When first-stage contributions are anonymous, subjects are better at predicting second-stage behavior, and maintain a substantially higher level of cooperation.

Collective environmental agreements (CEAs) refer to agreements negotiated between a group of polluting firms and a public regulatory body. The article analyses some potential problems with CEAs. First, we study free-riding. We show how the incentive constraint imposed by moral hazard determines the maximum feasible emission reduction under a CEA. When firms are short sighted, free-riding seriously undermines the effectiveness of a CEA. Adding uncertainty about environmental damage or future government action makes it even harder to satisfy the moral hazard constraint. Second, we show that cooperation on a different activity can reduce the incentives to free-ride, since firms can threaten to stop cooperating in order to deter deviations. This effect could explain why some CEAs may be successful. However, we also show that reciprocally the adoption of a CEA increases the possibilities for cooperation on other activities. This might be socially harmful if it translates into price collusion, for example. Finally, we explore the issue of how firms might allocate the abatement effort toward the collective target. We show that a CEA can help firms to coordinate on a reduction of quantity and a consequent price increase in order to benefit from implicit cartel profits. Our findings thus provide some cautionary arguments against the use of CEAs.

This paper presents the results from an experiment investigating whether framing affects the elicitation and predictive power of preferences for cooperation, i.e., the willingness to cooperate with others. Cooperation preferences are elicited in three treatments using the method of Fischbacher, Gächter and Fehr (2001). The treatments vary two features of their method: the sequence and order in which the contributions of other group members are presented. The predictive power of the elicited preferences is evaluated in a one-shot and a finitely-repeated public-good game. I find that the order in which the contributions of others are presented, by and large, has no impact on the elicited preferences and their predictive power. In contrast, presenting the contributions of others in a sequence has a pronounced effect on the elicited preferences and reduces substantially their predictive power. Overall, elicited preferences are more accurate at predicting behavior when others' contributions are presented simultaneously and in ascending order, like in Fischbacher, Gächter and Fehr (2001).

We study how norms can solve distributional conflict inside a clan and the efficient coordination of collective action in a conflict with an external enemy.We characterize a fully non-cooperative equilibrium in a finite game in which a self-enforcing norm coordinates the members on efficient collective action and on a peaceful distribution of the returns of collective action.