The survival of inefficient and efficient norms: Equilibria with and without meta-norms in a repeated norm enforcing game

Abstract

ABSTRACT Although meta-norms have been considered as the key to sustaining cooperation norms, this study argues that the meta-norms also facilitate the survival of inefficient norms. The opportunistic norm violation strategy is proposed as an alternative mechanism to motivate costly punishments. A repeated norm enforcing game, in which the externality of the normative action can be negative or positive, is analyzed. This game is equivalent to a social dilemma if the externality is large enough. The ranges of externalities that support tit-for-tat, meta-norm, and opportunism equilibria are compared. The meta-norm equilibrium has the highest stability; however, it can persist in negative externalities. Finally, the opportunism equilibrium is more stable than the tit-for-tat equilibrium, but it breaks down when the externality is small.