Die Mutter aller Kooperationsprobleme

Axel Ockenfels and Christoph Schmidt
2019. Zeitschrift für Wirtschaftspolitik, 68(2), 122-130.

The discussion of climate policy received new impetus in the spring of 2019. Since then the topic has dominated the public discourse in Germany. The Fridays for Future movement continues to generate considerable pressure on policy makers. In addition, scientists emphasize in rare interdisciplinary unanimity both how urgent a radical renewal in climate policy would be, and that a uniform price for greenhouse gas emissions is the indispensable core element of the necessary reforms in Germany and Europe. One central aspect of climate policy is, however, often overlooked in all this: climate protection is essentially an international problem of cooperation. For climate change, it does not matter where greenhouse gases are emitted. The success of national climate policy must therefore be judged by whether it contributes to establishing international cooperation to reduce global greenhouse gas emissions.

Sharing Guilt: How Better Access to Information May Backfire

Roman Inderst, Kiryl Khalmetski, and Axel Ockenfels
2019. Management Science, 65(7), 2947-3448.

We study strategic communication between a customer and an advisor who is privately informed about the most suitable choice for the customer but whose preferences are misaligned with the customer’s preferences. The advisor sends a message to the customer who, in turn, can secure herself from bad advice by acquiring costly information on her own. In our experiments, we find that making the customer’s information acquisition less costly leads to less prosocial behavior of the advisor. This can be explained by a model of shared guilt, which predicts a shift in causal attribution of guilt from the advisor to the customer if the latter could have avoided her ex post disappointment. We conclude that providing better access to information through, for example, consumer protection regulation or digital information aggregation and dissemination, may have unintended negative consequences on peoples’ willingness to take responsibility for each other.

Using Technology to Eliminate Congestion

Peter Cramton, R. Richard Geddes and Axel Ockenfels
2019. Journal of Institutional and Theoretical Economics (JITE), 175(1), 126-139.

Traffic congestion is a pervasive worldwide problem. We explain how to harness existing technologies together with new methods in time-and-location markets to eradicate traffic congestion along with its attendant social harms. Our market design for road use builds on congestion pricing and models of efficient pricing in the electricity sector. The market maximizes the value of a transport network through efficient scheduling, routing and pricing of road use. Privacy and equity concerns are addressed. Transparent price information provides essential information for efficient long-term investment in transport.

People prefer coordinated punishment in cooperative interactions

Lucas Molleman, Felix Kölle, Chris Starmer and Simon Gächter
2019. Nature Human Behaviour, 3, 1145–1153.

Human groups can often maintain high levels of cooperation despite the threat of exploitation by individuals who reap the benefits of cooperation without contributing to its costs1–4. Prominent theoretical models suggest that cooperation is particularly likely to thrive if people join forces to curb free riding and punish their non-contributing peers in a coordinated fashion5. However, it is unclear whether and, if so, how people actually condition their punishment of peers on punishment behaviour by others. Here we provide direct evidence that many people prefer coordinated punishment. With two largescale decision-making experiments (total n = 4,320), we create minimal and controlled conditions to examine preferences for conditional punishment and cleanly identify how the punishment decisions of individuals are impacted by the punishment behaviour by others. We find that the most frequent preference is to punish a peer only if another (third) individual does so as well. Coordinated punishment is particularly common among participants who shy away from initiating punishment. With an additional experiment we further show that preferences for conditional punishment are unrelated to wellstudied preferences for conditional cooperation. Our results highlight the importance of conditional preferences in both positive and negative reciprocity, and they provide strong empirical support for theories that explain cooperation based on coordinated punishment.