Working Paper: CEPR ID: DP17534
Authors: Vasiliki Fouka; Alain Schlpfer
Abstract: Under what conditions does intergroup contact lead to conflict? We provide a novel answer to this question by highlighting the role of reputation mechanisms in sustaining cooperation. Reputational concerns can deter defection in one-time interactions within a group, but the informational content of reputation can differ across groups. We consider two types of information. Punishment-based reputation (a "culture of honor") represents past sanctioning behavior of individuals, while a reputation based on image scoring captures past cooperative and uncooperative acts. While either type can successfully sustain cooperation within a group, we show theoretically that interactions of individuals from a punishment-based culture with those from a culture of image scoring can lead to widespread inter-group tensions. Mutual cooperation is a more likely outcome if both cultures use a similar reputation mechanism. We find empirical support for the model's predictions across phenomena related to the emergence of social tensions. Cross-cultural differences in the importance of retaliation predict patterns of host population discrimination against immigrants and variation in bilateral conflict across ethnic groups.
Keywords: cooperation; reputation; indirect reciprocity; discrimination; conflict
JEL Codes: P0; Z1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cultural incompatibility in reputation systems (Z13) | intergroup cooperation failure (D74) |
| cultural incompatibility in reputation systems (Z13) | conflict escalation (D74) |
| interactions between punishment-based cultures and image-scoring cultures (P37) | widespread intergroup tensions (J15) |
| lack of incentives to cooperate (C72) | avoidance and conflict (D74) |
| differences in revenge motifs (Z13) | intergroup conflict outcomes (D74) |