Arthur Schram

Humans frequently cooperate to achieve benefits unattainable through selfish behaviour. Punishment of free-riders is key for sustaining cooperation, but it is also costly, raising questions about the origins of such behaviour. Some evolutionary models suggest that individuals may be willing to hurt unknown others in competitive environments. However, empirical evidence about the effect of the scale of competition on strategies involving hurtful behaviour in human groups, such as spite, retaliation for hurting and punishment of free-riders, is missing. Using a laboratory experiment, we manipulate the scale of competition to investigate its influence on hurtful and helpful behaviours, between unknown humans in an indirect reciprocity game. We observe distinct behavioural patterns between local and global competition. When competition is local and thus confined to take place within isolated groups, we find frequent hurting as an expression of spite and retaliation. In contrast, when competition extends globally across several groups, hurting is used primarily for punishment of free-riders, whereas helping behaviour is rewarded, which together promotes cooperation. Thus, while isolated competition fosters inefficient, anti-social behaviour, global competition encourages pro-sociality and cooperation.

Private infrastructure investment is profitable only if followed by a sufficiently high price, but pricing may be subject to regulation. We study markets where regulation is determined by elected policymakers. If price regulation is subject to manipulation then private investors may delay investment fearing an electoral pressure on future prices, leading to a holdup inefficiency. This could possibly be alleviated by regulatory independence, where policymakers can no longer influence the prices. However, to encourage investment the policymakers may install regulation that serves the interests of the infrastructure owners (“regulatory capture”) and lead to inefficient pricing. Regulatory independence can then be detrimental as it may entrench this capture. Whether inefficiencies can be moderated by creating regulatory independence therefore depends on the policymakers’ objectives. We provide experimental evidence for such capture entrenchment and detrimental effects of regulatory independence that therefore arise. Even without independence, the uninformed voters do not provide sufficient pressure to remove these effects. On the other hand, we observe that regulatory independence does reduce holdup inefficiency when policymakers align with the public interest.

This paper studies the effects of social status—a socially recognized ranking of individuals—on prosocial behavior. We use a laboratory experiment and propose a theory to address this issue. In a one-shot game, two players, whose social status is either earned or randomly assigned, jointly make effort contributions to a project. Player 1 first suggests an effort level for each player to player 2 who then determines the actual effort levels. Deviation from the proposal is costly. We find causal evidence that high-status players are less selfish than their low-status counterparts. In particular, high-status players 2 provide relatively more effort, ceteris paribus, than those with low status. The experimental results and theoretical framework suggest that a high social ranking yields more social behavior and that this can be attributed to the sense of responsibility that it gives.

Does competition affect moral behavior? This fundamental question has been debated among leading scholars for centuries, and more recently, it has been tested in experimental studies yielding a body of rather inconclusive empirical evidence. A potential source of ambivalent empirical results on the same hypothesis is design heterogeneity—variation in true effect sizes across various reasonable experimental research protocols. To provide further evidence on whether competition affects moral behavior and to examine whether the generalizability of a single experimental study is jeopardized by design heterogeneity, we invited independent research teams to contribute experimental designs to a crowd-sourced project. In a large-scale online data collection, 18,123 experimental participants were randomly allocated to 45 randomly selected experimental designs out of 95 submitted designs. We find a small adverse effect of competition on moral behavior in a meta-analysis of the pooled data. The crowd-sourced design of our study allows for a clean identification and estimation of the variation in effect sizes above and beyond what could be expected due to sampling variance. We find substantial design heterogeneity—estimated to be about 1.6 times as large as the average standard error of effect size estimates of the 45 research designs—indicating that the informativeness and generalizability of results based on a single experimental design are limited. Drawing strong conclusions about the underlying hypotheses in the presence of substantive design heterogeneity requires moving toward much larger data collections on various experimental designs testing the same hypothesis.

This paper studies how social ties interact with bribery and corruption. In the laboratory, subjects are in triads where two ‘performers’ individually complete an objective real-effort task and an evaluator designates one of them as the winner of a monetary prize. In one treatment dimension, we vary whether performers can bribe the evaluator—where any bribe made is non-refundable, irrespective of the evaluator’s decision. A second treatment dimension varies the induced social ties between the evaluator and the performers. The experimental evidence suggests that both bribes and social ties may corrupt evaluators’ decisions. Bribes decrease the importance of performance in the decision. The effect of social ties is asymmetric. While performers’ bribes vary only little with their ties to the evaluator, evaluators exhibit favoritism based on social ties when bribes are not possible. This ‘social-tie-based’ corruption is, however, replaced by bribe-based corruption when bribes are possible. We argue that these results have concrete consequences for possible anti-corruption policies.