Sustaining Cooperation: Community Enforcement vs. Specialized Enforcement

Daron Acemoglu and Alexander Wolitzky

No 21457, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We introduce the possibility of direct punishment by specialized enforcers into a model of community enforcement. Specialized enforcers need to be given incentives to carry out costly punishments. Our main result shows that, when the specialized enforcement technology is sufficiently effective, cooperation is best sustained by a “single enforcer punishment equilibrium,” where any deviation by a regular agent is punished only once, and only by enforcers. In contrast, enforcers themselves are disciplined (at least in part) by community enforcement. The reason why there is no community enforcement following deviations by regular agent is that such actions, by reducing future cooperation, would decrease the amount of punishment that enforcers are willing to impose on deviators. Conversely, when the specialized enforcement technology is ineffective, optimal equilibria do punish deviations by regular agents with community enforcement. The model thus predicts that societies with more advanced enforcement technologies should rely on specialized enforcement, while less technologically advanced societies should rely on community enforcement. Our results hold both under perfect monitoring of actions and under various types of private monitoring.

JEL-codes: C73 D72 D74 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
Note: POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Daron Acemoglu & Alexander Wolitzky, 2020. "Sustaining Cooperation: Community Enforcement versus Specialized Enforcement," Journal of the European Economic Association, vol 18(2), pages 1078-1122.

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Working Paper: Sustaining Cooperation: Community Enforcement vs. Specialized Enforcement (2015)
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