CONTRIBUTIONS TO PUBLIC GOODS AND SOCIAL PREFERENCES: RECENT INSIGHTS FROM BEHAVIORAL ECONOMICS

How cooperation emerges between non-kins is a key issue for understanding the evolution of societies. Exploring the role of the heterogeneity of social preferences in the decision to contribute to the provision of public goods reveals that conditional cooperation explains the decay of contributions over time. Moral rules can, however, counter this evolution. Indeed, altruistic sanctions can turn a double moral hazard problem into a major source of cooperation. While in the absence of institutions a minority of selfish individuals leads the majority of other-regarding individuals to free-ride, the implementation of appropriate institutions can lead them to behave as the selfless individuals.