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This experimental study compares the effectiveness and efficiency of ostracism and communication on creating and sustaining cooperation in voluntary contribution mechanism (VCM). We find that the average contributions decline over time in the baseline VCM. There is a significant increase in the average contributions in the VCM with ostracism, and an even larger increase in the VCM with communication. Communication thus leads to more cooperation, higher efficiency and more equitable payoffs than ostracism. Such effects sustain even in the long run, after we eliminate the opportunity to ostracize or communicate. These findings suggest that social norms can form under the influence of different mechanisms and some mechanisms are better than others at creating and sustaining cooperative norms.

Creating self-sustained social norms through communication and ostracism