Culture and prevalence of sanctioning institutions

Abstract

To investigate the impact of culture on the acceptance and prevalence of sanctioning institutions, we report the results of controlled lab experiments in two countries with substantial cultural differences: Germany and Turkey. We find, if a sanctioning institution is one of two alternatives that individuals can freely choose in an endogenous setting, then it is the clear winner against a non-sanctioning institution, both in Germany and Turkey. Though there are some differences in initial institutional preferences and contributions in both countries, the dynamics of institution choice, the evolution of contributions and sanctioning behavior are remarkably similar. Our results extend the findings of a previous study by Herrmann, Thöni, and Gächter (2008) that finds less cooperative behaviors in some countries (among them Turkey) if the sanctioning institutions are exogenous. We show that in one of those countries, Turkey, in an endogenous setting, sanctioning institutions beneficial to societies are adapted and prevail.