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Bowles, S., Gintis, H. (2004). Persistent Parochialism: Trust and Exclusion in Ethnic Networks, Journal of Economic Behavior and Organization 55, 1-23.

Decentralized groups such as close knit residential neighborhoods and ethnically linked businesses often achieve high levels of cooperation while also engaging in exclusionary practices that we call parochialism. We investigate the contribution of within-group cultural affinity to the ability of parochial groups to cooperate in social dilemmas. Consistent with some recent experimental evidence, cooperation among members of culturally homogeneous groups may not come about because cultural affinity overrides individual self interest, leading members to behave altruistically towards others in their group. Rather, cultural affinity may support cooperation by altering the information structure of the interaction. We provide an economic analysis of parochial networks in which the losses incurred by not trading with outsiders are offset by an enhanced ability to enforce informal contracts by fostering trust among insiders. We show that since larger and more heterogeneous networks have lower quality information but greater trading opportunities, there is a range of degrees of parochialism for which parochial networks can coexist with an anonymous market offering unrestricted trading opportunities.

Authors

Bowles, Samuel

Note: all the information contained in this page is taken from Prof. Bowles' personal web site. Please check this link for updates and further details. My research focuses on two areas (much of it conducted jointly with Herbert Gintis and Collaborators). The first concerns the co-evolution...

Gintis, Herbert

Herbert Gintis (born 1940) is an American behavioral scientist, educator, and author. He is notable for his foundational views on Altruism, Cooperation, Epistemic Game Theory, Gene-culture Coevolution, Efficiency wages, Strong Reciprocity, and Human capital theory. Gintis has also written...

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