Working Paper: NBER ID: w30517
Authors: Vasiliki Fouka; Alain Schläpfer
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: intergroup conflict; reputation mechanisms; cultural differences; cooperation
JEL Codes: P0; Z1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Punishment-based reputation (K42) | behaviors within group (C92) |
| Image-based reputation (Y90) | cooperation levels (C71) |
| Interaction between punishment-based and image-based reputation (C73) | intergroup tensions (D74) |
| Similar reputation mechanisms (C59) | mutual cooperation (P13) |