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Department of Economics Seminar with Professor Simon Gaechter, University of Nottingham The scope of cooperation across societies
Abstract: The wealth of nations depends not only on institutions but also on voluntary cooperation among citizens. We measure the scope of cooperation across culturally diverse societies using interactive, repeated, incentivized public goods experiments, with and without punishment. We conducted standardized experiments in 43 countries with comparable participants (n=3,876). Despite identical incentives, cooperation and punishment vary sharply across societies, generating efficiency-of-cooperation gaps of up to 83pp between the most and least successful populations. To explain this variation, we propose a framework—the ABC model—in which everyday experiences of cooperation shape the beliefs individuals bring into the laboratory, to which they respond conditionally cooperatively. Consistent with the ABC model, cooperation and punishment are strongly associated with behavioral and survey measures of cooperation and trust, as well as with institutional quality and cultural values, with many correlations exceeding 0.5. Follow-up experiments (n=1,092) provide causal evidence for the belief channel, explaining the observed cross-societal variation.