Bertolini

Rubbettino Editore
THE EFFICIENCY OF THE SPONTANEOUS PRODUCTION OF NORMS

Author(s): Daniele Bertolini
Source: Il Politico, NUOVA SERIES, Vol. 80, No. 2/3(239-240) (Maggio-Dicembre 2015), pp. 5-
27
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IL POLITICO (Univ. Pavia , Italy)
2015, anno LXXX, nn. 2-3, pp. 5-27
THE EFFICIENCY OF THE SPONTANEOUS

PRODUCTION OF NORMS
di Daniele Bertolini
The issue of right or wrong arises only when cooperation is disturbed

and each wants to shift the blame for the discord.
Rudolf Dreikurs ( The Challenge of Marriage, 1946)
Introduction
The purpose of this article is to assess the advantages and disadvan-

tages in terms of efficiency of spontaneous law-making processes as
compared to public centralized law-making institutions. First, this paper
explains the mechanisms underlying the emergence of socially enforced
standards of behaviour in the absence of centralized enforcing institu-
tions. Second, it identifies the conditions under which these spontaneous
processes are likely to result in the production of efficient norms. The
analysis here proposed focuses on the spontaneous emergence of norms
(hereinafter "sen") in Prisoner Dilemma (hereinafter "pd") situations.
For the limited purposes of this discussion, I define efficiency as the
attainment by the community of a social-surplus enhancing equilibrium.
1 . The Spontaneous Emergence of Norms
Assume a social setting characterized by the following three con-

ditions: (1) social constraints prevent people from engaging in violent
appropriations of others' property (such as fraud, robbery, theft, and
Ryerson University; Ted Rogers School of Management; iuss (Institute for Advanced
Study of Pavia).
so forth); (2) there is no centralized law-making authority that has
the capacity to create and enforce legal rules that reward cooperation
and punish opportunistic behaviour in transactional contexts'; (3) a
potential Pareto superior social equilibrium is achievable if and only
if a minimum number of community members observe and enforce an
efficient standard of behaviour by overcoming collective action pro-
blems and strategic opportunism2.
Under these assumptions, the two questions that concern us are (1)
whether -and, if so, under which conditions - a process of repeated
dyadic interactions among community members can lead over time
to the emergence of efficient norms, and (2) whether the spontaneous
emergence of norms has comparative advantages in terms of efficiency
relative to alternative law-making institutions. The analysis includes
both "social norms" and "customary rules"; I ignore the differences
between these two categories of norms and collapse them into the no-
tion of "spontaneous norms", regardless of whether these are qualified
as social norms or warrant legal consideration as customary rules.
2. The Advantages of sen
It is useful to identify three groups of individual actors that are in-

volved in the production of norms: (1) norm producers, i.e., the actors
who participate to the norm-formation process; (2) the target actors,
i.e., the actors whose behaviour is regulated by the norm, and (3) norm
beneficiaries, i.e., those whose interests are protected by the norm.
The crucial characteristic of sen is that often norm producers coincide
with both target actors and norm beneficiaries. That is, while centrali-
zed law-making institutions (e.g., legislatures, courts, bureaucracies)
exercise law-making authority upon delegation of norm beneficiaries,
spontaneous norms rest on the widespread consensus of people subject
1 This environmental setting corresponds largely to the one described in A. T. Kron-

man, Contract Law and the State of Nature, in "Journal of Law Economics and Organi-
zation", vol.1, n. 1, 1985, pp. 6-7 (identifying a scenario characterized by "possessory
security" and "transactional insecurity"). It also corresponds to the scenario analyzed in
R. C. Ellickson, Order without Law: How Neighbors Settle Disputes , Cambridge, Mass.,
Harvard University Press, 1991 , p. 144.
2 See the definition of social dilemma provided by T. Voss, Game Theoretical Per-
spectives on the Emergence of Social Norms , in M. Hechter, K. D. Opp (eds.), "Social
Norms", New York, Russell Sage Foundation, 2001 .
to the law as revealed by their behavioural choices, i.e., law-making
through practice.
The absence of delegation of law-making authority is the source
of comparative advantages of sen over public centralized law-making
institutions. First, in sen people express their preferences through di-
rect participation in the norm formation process instead of delegating
the norm-creating function to a third party. This increases the infor-
mational efficiency of the process of norm creation because, unlike
centralized law-making bodies, individuals have a direct perception
of their costs and benefits3. Second, the fact that the norm-producers
and norm-beneficiaries are two identical sets of individuals raises the
cost of irrational behaviors in the process of norm creation, and the-
refore generates incentives for norm producers to have rational be-
liefs and behave accordingly. This is a significant difference between
the incentive structure confronted by norm-producers in sen and the
incentives faced by voters and politicians in political processes. As
discussed subsequently in this chapter, the relative advantages of sen
should always be weighted against the problems of adaptive efficiency
under conditions of high information and transaction costs.
3. The Disadvantages of sen
Having examined the advantages of spontaneous law, I now briefly

examine its limitations. First, in the absence of centralized coordina-
ting devices, limited information and bounded rationality might cause
individual actors to follow inefficient norms. Information and rationa-
lity problems can result in the emergence and consolidation of norms
based on the suboptimal use of available information and on the failu-
re to aggregate relevant information4. In these cases, social norms can
stabilize Pareto-inferior states5. Second, the lack of a centralized law-
3 See F. Parisi, Toward a Theory of Spontaneous Law, in "Constitutional Political

Economy" n. 6, 1995, p. 212; R. D. Cooter, Structural Adjudication and the New Law
Merchant: A Model of Decentralized Law , in "International Review of Law and Econo-
mics", n. 14, 1994; R. C. Ellickson, Order without Law: How Neighbors Settle Disputes,
cit., p. 171 (discussing problems of "metric appraisal of social welfare").
4 This point is emphasized by E. A. Posner, Law, Economics, and Inefficient Norms
in "University of Pennsylvania Law Review," vol. 144, 1996, pp. 1711-1719.
5 See, for examples of inefficient norms, J. Elster, The Cement of Society: A Study
of Social Order , Cambridge, Cambridge University Press, 1989, pp. 138-151; J. Elster,
maker in some cases might exacerbate the tendency of some groups to
consolidate standards of behaviours that maximize the welfare of the
group at the expense of group outsiders. That is, some norms impove-
rish outsiders more than they advantage insiders6. Examples are nor-
ms of loyalty among members of criminal groups (which strengthen
the groups at the expense of outsiders) or norms governing anticom-
petitive practices undertaken by members of a cartel (which impair
competition and extract consumers' surplus). Third, in some norms,
efficiency depends greatly on the number of people who follow the
norm, and there is no guarantee that a decentralized process will indu-
ce a sufficient number of people to adopt the rule. Because of costly
information, parties may not find a way to cooperate and set up an ef-
ficient rule. Furthermore, the simultaneous adoption of a new norm by
a sufficient number of people might confront the failure of collective
action. In short, the spontaneous emergence of law can be affected by
serious public good problems, both in the formative process and at the
stage of enforcing rules, which can result in the suboptimal production
and enforcement of norms.
Fourth, and relatedly, sen is an evolutionary process characterized
by randomness and path dependency, which might lead to the stabi-
lization of inefficient norms. The path-dependence effect is exacer-
bated by the presence of informational cascades. Because of limited
information, individual actors might rely excessively on others' pre-
vious choices, despite the fact that inefficient previous choices might
generate a cascade of mistaken subsequent decisions. Furthermore,
when people conform to the social norm in order to avoid reputational
damage, despite the knowledge that the behaviour is inefficient, repu-
tational cascades can generate negative-sum games with the attendant
waste of resources7.
Social Norms and Economic Theory , in "Journal of Economic Perspectives", n. 3, 1989,

p. 99.
6 R. C. Ellickson, Order without Law: How Neighbors Settle Disputes, cit., p. 169;
R. C. Ellickson, The Evolution of Social Norms: A Perspective from the Legal Academy,
in M. Hechter, K. D. Opp (eds.), "Social Norms", New York, Russell Sage Foundation,
2001 , p. 55; E. A. Posner, Law, Economics, and Inefficient Norms, cit., pp. 1722-1723; R.
Coûter, Structural Adjudication and the New Law Merchant: A Model of Decentralized
Law, cit., pp. 1684-1685.
7 E. A. Posner, Law and Social Norms, Cambridge Mass., Harvard University Press,
2000. pp. 40-42.
4. Norms as Evolutionary Responses to Game Inefficiencies
The process of sen can be usefully conceptualized through the

analytical framework offered by transaction-costs and game-theory
approaches8. Let me consider a basic scenario where the emergence
of some coordination problems among private actors generates a de-
mand for norms9. From a repeated game-theoretic perspective, in an
environment without transaction costs10, every time a Pareto-superior
alternative becomes available - thereby making the existing equili-
brium suboptimal - evolutionary corrective mechanisms, spurred
by repeated bargaining practice, would lead private actors to reach a
Nash equilibrium that corresponds to the adoption of a superior norm
that enables them to attain the maximum available (cooperative) sur-
plus" . Differently said, in the ideal world of zero transaction costs, the
spontaneous emergence of law through repeated contractual practice
would be the most efficient law-making process. There would be no
obstacles to cooperation, and parties would be able to adopt efficient
legal rules according to changing economic circumstances.
However, once the assumption of zero transaction costs is drop-
ped, the existence of a Pareto-superior alternative is not a sufficient
condition for the spontaneous emergence of the efficient legal rule12.
In general, if the costs for the individual of contributing to the col-
lective enforcement of a superior standard of behaviour exceed the
expected efficiency losses generated by the coordination problem the
rule is supposed to resolve, then there is no incentive for the individual
to contribute to the process of law creation and enforcement. Conse-
quently, either the community remains in a suboptimal equilibrium or
the construction of a centralized law-making process becomes neces-
sary for the society to adopt the superior norm.
8 The costs associated with sel are in large part related to the structure of the strategic
interaction between individuals and, conversely, the outcome of the strategic interaction
among individuals depends upon the structure of the costs associated with the adoption
and enforcement of such a standard of behaviour.
9 The problem can be usefully conceptualized with that of the demand for "swi-
tching" to a new and more efficient norm.
10 I.e., in a world without the costs associated with the process of adopting and en-
forcing norms.
" F. Parisi, Toward a Theory of Spontaneous Law , cit., p. 214.
12 F. Parisi, Toward a Theory of Spontaneous Law, cit., p. 214.
In general, a Pareto-superior rule tends to emerge and become con-
solidated over time only if the pattern of behaviour that is compatible
with the efficient norm is supported by Nash strategies, by all parties l3.
If the strategy consistent with the emergence and persistence of a su-
perior norm (e.g., a cooperative behavior) does not correspond to the
dominant strategy for one of the actors involved, he or she will always
be tempted to switch to the dominant strategy, thereby preventing the
community from consolidating a stable optimal Nash equilibrium.
In sum, in environments with significant transaction costs, two
conditions are necessary to support sen: (1) the availability of a Pare-
to-superior norm prescribing a pattern of behavior that enables society
to attain the higher cooperative surplus; (2) a Nash strategy equili-
brium supporting the pattern of behavior compatible with that superior
alternative. Under these two conditions, norms emerge spontaneously
over time, which enables the members of a community to overcome
evolutionary stalls and achieve an efficient outcome instead14. When
the behaviour conforming to a norm is supported by a Nash strategy
for all actors involved, the norm is self-enforcing, that is, rational ac-
tors conform in response to incentives that make conformity to the
norm convenient to them, despite the absence of a centralized enfor-
cing entity administering sanctions to norm violators. Self-enforcing
norms are also called "conjoint norms"15, emphasizing the fact that the
beneficiaries of the norm and the target actors conjoin to create and en-
force norms, which enables them to cooperate and attain the maximum
available cooperative surplus.
5. The Conditions for the Efficient sen in pd Situations
I turn now to examine the environmental and institutional condi-

tions under which an efficient Nash equilibrium can be reached spon-
taneously in a social dilemma situation. Specifically, I focus on the pd
13 F. Parisi, Toward a Theory of Spontaneous Law, cit. p. 214. See also T. Voss,
Game Theoretical Perspectives on the Emergence of Social Norms , cit.
14 From this perspective, norms can be conceptualized as "evolutionary responses to
game inefficiencies" or "possible correctives to strategic stalls". See: F. Parisi, Toward a
Theory of Spontaneous Law , cit., p. 21 1 .
15 J. S. Coleman, Foundations of Social Theory , Cambridge, Mass., Harvard Univer-
sity Press, Belknap Press, pp. 247-248.
10
situations16, in which the Nash equilibrium is a social-surplus minimi-
zing bilateral defection. In this type of situations the establishment of
a convention is not sufficient to ensure cooperation because once the
convention is realized, parties face an incentive not to conform to the
prescribed behavior. Consequently, sanctions against violators must
be administered to ensure mutually advantageous cooperation.
As already noted, in pd situations actors deal with a "first order"
collective action problem, i.e. they fail to achieve a mutually advanta-
geous efficient outcome because they do not have incentives to mutual
spontaneous cooperation. This first order collective action problem
generates the demand for norms that enables parties to achieve mutual
cooperation. However, because the creation and enforcement of norms
is itself a public good, a "second order" collective action problem ari-
ses, i.e., rational individuals do not have incentive to participate to the
collective action required to create and enforce norms17. The second
order collective action problem potentially prevents the community
from the creation of those norms that are required to overcome the
"first order" collective action problem.
This raises a puzzling issue: if individuals fail to overcome the
first order collective action problem, how can they overcome the se-
cond order collective action problem? Differently stated, if parties do
not have incentives to achieve the efficient cooperative outcome, how
could they have incentives to cooperate and produce a conjoint social
norm? Although there is no easy answer to this question, it is possible
to identify the conditions that facilitate a spontaneous solution to the
second order collective action problem in the absence of a centralized
lawmaker. This section identifies three factors that facilitate the crea-
tion of self-enforcing social norms: (1) close-knittedness, (2) role-re-
versibility, and (3) reciprocity.
16 E. Ullmann-Margalit, The Emergence of Norms, Oxford, Clarendon Press,

1977; E. A. Posner, Law , Economics, and Inefficient Norms, cit.
17 P. Oliver, Reward and Punishments as Selective Incentives for Collective Action ,
in "American Journal of Sociology", vol. 85, n. 6, 1980; D. D. Heckathorn, Collective
Action and Second-Order Free Rider Problem , in "Rationality and Society," vol. 1, n. 1,
1989.
11
5.1 Close-Knittedness
Repeated game theory has long demonstrated that under appro-

priate circumstances, long-term repeated interactions generate the
conditions for the decentralized self-enforcement of conjoint social
norms18. To understand this point, it is useful to focus on the core
parameters of game-theory models: (1) the structure of parties' payof-
fs, i.e., the relative costs of conflict and cooperation, (2) the discount
factor, i.e., the "shadow of the future", (3) the number of decision-ma-
king actors, i.e., the size of the group that benefits from the norm, and
(4) actors' ability to promptly punish defection. Based on these four
variables, repeated game theory suggests that self-enforcing norms of
cooperation are likely to emerge within (relatively) small communities
of culturally and economically homogenous farsighted individuals en-
gaging in repeated mutual interactions.
Consistent with this conclusion (but from a different methodologi-
cal perspective) Ellickson has suggested that social welfare-enhancing
norms tend to emerge spontaneously if the population is a close-knit
community19. The notion of close-knittedness summarizes the es-
sential conditions facilitating the spontaneous emergence of efficient
norms in environments lacking a centralized law-making authority.
Close-knit environments reduce the transaction and information costs
associated with informal enforcement, thereby fostering cooperative
behaviour in pd situations. By drawing on Ellickson's work and other
more recent contributions, it is possible to identify four constitutive
elements of "close-knittedness", including (1) non-zero sum situa-
tions, (2) reciprocal enforcing power, (3) continuing relationship, and
(4) adequate knowledge and information.
(1) Non-Zero Sum Situations. Zero-sum (or constant-sum) games
are purely distributive situations: what one player gains, the other loses.
18 See M. Taylor, Anarchy and Cooperation, Chichester, Wiley, 1976; M. Taylor,

The Possibility of Cooperation, Cambridge, Cambridge University Press, 1987; R. Axel-
rod, The Evolution of Cooperation, New York, Basic Books, 1984.
19 See R. C. Ellickson, Order without Law: How Neighbors Settle Disputes , cit., p.
167 ("members of a close-knit group develop and maintain norms whose content serves
to maximize the aggregate welfare that members obtain in their work-day affairs with
one another"). The hypothesis that norms emerge in society as a social- welfare enhancing
mechanism is also put forward by E. Ullmann-M arg alit, The Emergence of Norms, cit.,
and K. D. Opp, The Emergence And Effects Of Social Norms: A Confrontation Of Some
Hypotheses Of Sociology And Economics, in "Kyklos", vol. 32, n. 4, 1979.
12
These are purely conflictual games with no room for mutually advan-
tageous cooperation. Because there is no available aggregate surplus
from reciprocal cooperation or coordination, the conflictual nature of
distributive games entails no incentive for mutually advantageous co-
operation or coordination. Thus, in zero-sum (or constant-sum) situa-
tions, norms will not emerge spontaneously without the presence of a
centralized third-party institution20. Unlike purely distributive games,
close-knit environments are characterized by the availability of a sur-
plus gained from mutual cooperation. That is, norms ensuring coope-
ration can emerge spontaneously in positive sum games.
(2) Reciprocal Enforcing Power. In strategic interactions, credible
threats and promises affect actors' strategies21. This principle applies
to the context of a close-knit community, with the presence of a promi-
se (or threat) to promptly enforce sanctions in the case of norm viola-
tion. The condition of credibility is because the informal power to pu-
nish norms' violations is widely distributed among the members of the
community. Differently stated, the power reciprocity among group's
members constitutes the structural condition ensuring the credibility
of the enforcing mechanisms. I will discuss reciprocity in greater de-
tail in the next section.
(3) Continuing Relationships. In the absence of a centralized en-
forcing mechanism, continuing relationships among community mem-
bers provide the opportunity for a credible enforcement mechanism.
Close-knit communities are stable social networks in which the proba-
bilities of future encounters are high enough to make the enforcement
of sanctions credible. The prospect of future repeated interactions has
a twofold incentive effect. On the one hand, it increases the expected
costs of defection versus cooperation for norm violators (thereby in-
creasing the net benefits from abiding by the rule). On the other hand,
it increases the net benefit gained by participating in collective en-
forcement because the expected benefit of the compliance of a tar-
get actor increases with the likelihood of future encounters. In short,
the probability of future interactions among members of a close-knit
community modifies current individual behaviours by strengthening
the enforcement mechanism and weakening the attitude toward norm
20 See G. Tullock, The Social Dilemma: The Economics of War and Revolution,
Blacksburg, University Publications, 1974.
21 To be effective, threats and promises should also be consistent with the Nash equi-
librium.
13
violation. In tum, this enables the community to prevent or limit op-
portunistic behaviours that defeat cooperation.
The possibility of future interaction plays an important role in si-
tuations where individual incentives are misaligned22. In this respect, it
has long been demonstrated that the effect of future interactions on the
levels of cooperation in a prisoner's dilemma game is largely influen-
ced by the players' discount rate. This line of reasoning culminates in
the folk theorem according to which any (individually rational) payoff
can be supported by a Nash equilibrium in infinitely repeated games, if
players have sufficiently high discount factors. Although a discussion
of the folk theorem is beyond the scope of this study, it is important
to underline the existence of a threshold value of the discount factor,
above which rational private parties decide to cooperate.
(4) Adequate Knowledge and Information . The conditions of power
reciprocity and continuing relationships are not sufficient to ensure
cooperation. People have incentives to cooperate only if they have
adequate information about the structure of payoffs associated with the
alternative available course of action in each period. Second, coope-
ration requires historical knowledge about the behaviour of opposing
players in prior games. In both respects, the existence of close-knit
groups reduces the costs of obtaining the knowledge and information
necessary for cooperation. Close-knittedness helps group members to
develop a common "objective valuation system, which they need in
order to assess the welfare enhancing tendencies of various norms"23.
This is a crucial factor: strategies that evolve into social norms are
those that maximize the expected payoff for each group member and
that are enforced against case-by-case opportunism. In addition, gos-
sip networks and reputational mechanisms, which normally emerge in
close-knit communities, enable people to gain information about how
group members acted in the past and how reliable and trustworthy
they are as potential trading partners.
Before proceeding, the following clarification regarding close-k-
nittedness is needed. The four structural conditions identified above
22 F. Parisi, The Formation of Customary Law, Paper Presented at the 96 Annual

Conference of the American Political Science Association, Washington, D.C. September,
2000, p. 9; D. M.Kreps, P. Milgrom, J. Roberts, R. Wilson, Rational Cooperation in
the Finitely Repeated Prisoner 's Dilemma, in "Journal of Economic Theory", n. 27, 1982.
23 R. C. Ellickson, Order without Law: How Neighbors Settle Disputes, cit., p. 181 .
14
do not necessarily require that close-knit groups are small24. Although
a small group size certainly facilitates cooperation, the structural re-
quisites of reciprocity, long-term relationships, adequate knowledge
and information may occur independently of the group size. Ultima-
tely, targeted and beneficiary actors may be geographically distant and
operate in different industries. This point emphasizes the high poten-
tial of sen as an effective source of regulation in various regulatory
environments.
5.2 Role Reversibility
This section briefly examines two mechanisms that induce coope-

ration in the absence of a centralized enforcing authority: (a) role-re-
versibility and (b) reciprocity constraints. These mechanisms prove
useful when the incentives of parties to an exchange are not aligned.
In these contests, cooperation-inducing mechanisms prove useful in
realigning the incentives of parties and facilitating sen25.
Role reversibility occurs when the parties to a repeated dyadic
exchange face over time the same probability of being on either side
of the exchange. This is also called "stochastic symmetry"26, underli-
ning the fact that parties cannot predict on which side of the relation-
ship they will be in future exchanges (e.g., they can be either seller or
buyer with unpredictable probability). Under these conditions, parties
are subject to symmetric incentives. Therefore, the parties face the in-
centive to converge upon the same set of rules that maximize their
individual benefits (and maximize the aggregate welfare). In short,
environments characterized by stochastic symmetry are more likely
to be regulated by spontaneously emerged norms of behaviour27 .The
emergence of medieval lex mercatoria is a classic example of a spon-
taneous law that emerged under conditions of stochastic symmetry.
Merchants acted as both buyers and sellers; therefore, they had no in-
24 R. C. Ellickson, Order without Law: How Neighbors Settle Disputes, cit., p. 1 82.
25 Obviously, the principal mechanism used to redress incentive misalignment is the
existence of enforcement-contractual agreement. Here, I am discussing the lawlessness of
environments, which are characterized by the lack of centralized enforceable institutions.
The central question begs whether there are structural conditions facilitating the conclu-
sion of efficient dyadic exchanges in the absence of centralized enforcing institutions.
26 F. Parisi, The Formation of Customary Law, cit., p. 10.
27 F. Parisi, Theory of Spontaneous Law, cit., pp. 217-218.
15
centive to promote systematically biased rules that favoured one party.
As Parisi emphasizes, "[T]he stochastic symmetry of the relationship
between medieval merchants eliminated the parties' incentives to arti-
culate one-sided rules"28.
5.3 Reciprocity Constraints
Structurally asymmetric situations can be redressed through in-

stitutional constraints that induce reciprocity by binding the strategic
choices of opposing parties. This mechanism is also called "induced
symmetry", emphasizing the fact that the symmetric advantages of co-
operation are generated by the presence of institutional constraints that
eliminate the incentives to undertake unilaterally defective strategies.
Parisi explains reciprocity constraints as "Mechanisms that ensure au-
tomatic reciprocity [by eliminating] the access to off-diagonal outco-
mes. If one players' strategy is rigidly bound to that of his opponent,
the reward for unilateral defection is rendered unobtainable"29. This
is because the mechanism of reciprocity constraints formalizes a "tit-
for-tat" strategy, in which opposing parties with symmetric incentives
engage in a defection strategy that punishes unilateral defection30.
The classic example of induced reciprocity is provided by interna-
tional law, where the lack of a superior centralized political authority
leaves wide room for unilateral defection strategies by single states.
To illustrate this point, Parisi emphasizes the case of article 21(1 )b of
the Vienna Convention of 1969, which regulates the legal effects of
the formulation reservation in the process of stipulating treaties among
states. This provision establishes that the formulation by state A of a
reservation against state B generates automatically the effect of pro-
ducing a reservation of state B against state A3 '.Another interesting
example of a reciprocity-inducing mechanism is the creation of patent

30 See F. Parisi, The Formation of Customary Law, cit., p. 13 ("in those areas of the
law where custom is recognized as a primary source of law, mechanisms of automatic
reciprocity are generally acknowledged among the meta-rules of the system").
31 "A reservation established with regard to another party [...] (a) modifies for the
reserving State in its relations with that other party the provisions of the treaty to which
the reservation relates to the extent of the reservation; and (b) modifies those provisions to
the same extent for that other party in its relations with the reserving State".
16
pools in automobile and aircraft manufacturing industries. A patent
pool is an agreement between firms in an industry sector to license to
one another one or more of their patents covering the technology of
use in the industry. This mechanism of reciprocal licensing conces-
sions is designed to facilitate the conditions of close-knittedness by
"creating the occasion for repeat-play, reciprocal bargaining, versus
more costly one-shot exchanges"32.
6. The Process of sen
The identification of the conditions facilitating an efficient sen

do not yet explain the (social and economic) mechanisms by which
new norms emerge or supplant old, inefficient ones. In the following
three subsections, I briefly discuss three explanatory hypotheses of
how norms emerge and evolve spontaneously, thereby overcoming the
coordination and incentive problems associated with the creation and
enforcement of legal rules.
6.1 Change Agents and Informational Cascades
The first question to confront concerns how self-interested indivi-

duals belonging to a community can acquire the technical and social
knowledge necessary to appreciate the benefits of a superior social
norm. Ellickson developed an explanatory model that proves useful
in this respect33. He describes the mechanism of norm production as
a market for norms. The demand for norms arises from the need of
group members to overcome some negative externality and induce pe-
ople to internalize the costs of their behaviours. The group members
can assume three distinct roles with respect to the process of norm
emergence: actors, enforcers, and members of the audience. Actors
are people engaging in some primary behaviour having consequences
for the welfare of the group. Enforcers observe actors' behaviours and
administer punishments or rewards. Members of the audience observe
32 R. P. Merges, Contracting into Liability Rules: Intellectual Property Rights and

Collective Right Organizations, in "California Law Review", vol. 84, n. 5, 1996.
33 R. C. Ellickson, The Evolution of Social Norms: A Perspective from the Legal
Academy, cit..
17
both actors and enforcers and administer social rewards and punish-
ments to enforcers in the form of either social esteem or disesteem.
The supply of new norms is provided by either the actors (through
their pattern of behaviour) or the enforcers (through their enforcement
reaction to actors' behaviour).
The key point is that group members are heterogeneous in (1) per-
sonal endowments, (2) discount rates, (3) technical intelligence (i.e.,
the ability to assess costs and benefits of alternative pattern of beha-
viours), (4) social intelligence (i.e., the ability to forecast people's re-
actions to norm change), and (5) leadership skills. Because of these
differences, group members play distinct roles in the process of legal
change. When some exogenous shock in the social-economic environ-
ment triggers the need for a new superior social norm, some actors or
enforcers have incentives to supply a new advantageous social norm
by anticipating other group members. Ellickson uses the term "change
agents"34 to describe the actors or enforcers who first react to the exo-
genous shock by supplying the new norm.
Because of their superior technical, social, intelligence, and lea-
dership skills, change agents face lower opportunity costs or higher
benefits in the process of legal change. "Self-motivated" leaders an-
ticipate that they will receive greater benefits from the new norms.
"Norm entrepreneurs" promote a change in a specific norm; they pos-
sess a high level of technical knowledge that enables them, respecti-
vely, to appreciate early the cost-benefit advantage of a new social
practice and to anticipate that experts among the group's members
will confer esteem on the promoter of the change. Finally, "opinion le-
aders" do not necessarily receive tangible benefits from the new norm
(as self-interested leaders) and do not possess necessarily superior
technical intelligence (as norm entrepreneurs). However, they have
a high level of social intelligence, which enables them to anticipate
which social change would likely receive greater social support. They
observe other change agents and decide which legal change to support.
As Ellickson emphasizes, "[ojpinion leaders therefore play a pivotal
role in determining whether a change agent succeeds in triggering a
cascade toward a new norm"35.

Academy , cit., p. 41.
18
When an exogenous shock determines the social-economic condi-
tions favouring a change of the existing social practices, the self-inte-
rested leader and norm entrepreneurs supply new norms that have the
potential to improve the social welfare by governing the social dilem-
ma more efficiently. Self-interested leaders advocate social change by
undertaking exemplary acts or conferring rewards and punishments to
signal the efficiency of the new norm (or the inefficiency of the exi-
sting norm). Opinion leaders, if they foresee social conditions that are
favourable to promote the transition toward the new norm, start con-
ferring esteem on change agents that have acted as promoters of the
change. At this point, some members of the audience will finally be in
a condition to appreciate the benefits of the superior social norm. They
will be encouraged by the positive reactions of the opinion leaders to
the social change and by the appreciation by technical experts of the
new norm. When some members of the audience begin conforming to
the new norm, informational and reputational cascades will converge
in determining a mass migration toward the new norm. Informational
cascades occur because the mass of ordinary members of the audience
will interpret the early supply of the norm as a signal of its efficiency
and the social approbation of the new pattern of behaviour. Reputatio-
nal cascades will reinforce the tendency to conform because ordinary
audience members will avoid being socially marginalized.
6.2 Norm Internalization
Another explanation of the emergence of norms refers to the pro-

cess of internalization of norms by target actors. This point is the
subject of a vast literature investigating the moral, psychological, and
philosophical reasons why people internalize norms36. Here I draw
some conclusions about how internalization affects the incentive
structure of individuals and how it helps explain the emergence of
norms.
36 See E. Q. Campbell, The Internalization of Moral Norms, in "Sociometry," vol.

27, n. 4, 1964.; J. F. Scott, Internalization of Norms: a Sociological Theory of Moral
Commitment, Englewood Cliffs, NJ, Prentice-Hall, 1971; A. Etzioni, Social Norms: In-
ternalization, Persuasion, and History, in "Law & Society Review," vol. 34, n. 1, 2000;
R. D. Cooter, Do Good Laws Make Good Citizens? An Economic Analysis of Internali-
zed Norms, in "Virginia Law Review," vol. 86, n.8, 2000.
19
First, from an economic standpoint, internalization provides in-
dividuals with additional incentives to behave in the way the norm
prescribes, thereby altering the calculus of the psychological costs and
benefits of alternative strategies of behaviour. As Cooter notes, "in-
ternalization attaches a guilty penalty to violating a norm, which can
change the sign of the net psychological benefits"37. Consider the clas-
sic agency game situation in which two parties interact strategically.
The principal has to decide whether to invest or not invest, and the
agent has to decide whether to appropriate or cooperate. In the absence
of an enduring relationship or enforceable agreement, the agent has
the incentive to appropriate; the principal anticipates the non-coope-
rative behaviour of the agent and consequently decides not to invest.
The available cooperative surplus is lost because, in the absence of co-
ordinating devices, non-cooperation is the dominant strategy of both
actors. In contrast, the internalization of the norm that prescribes co-
operation on the part of the agent reduces the payoff of appropriation,
thereby rendering cooperation the dominant strategy38. "In the agency
game, people who internalize the norm will cooperate, not appropria-
te, even if the objective payoff for cooperating is slightly lower than
for appropriating"39.
Second, internalization provides individuals with additional incen-
tives to participate in the enforcement process. A person who inter-
nalizes a norm is more willing to invest resources to take part in the
enforcement process for the benefit of the others. Gossip networks and
ostracism are relatively cheap ways of sanctioning non-cooperative
behaviour and increasing the expected costs of norm violation. Thus,
the internalization of norms is a potentially effective mechanism to
overcome the "second order" free-rider problem, which plague the en-
forcement of norms in the absence of a centralized authority.
37 R. Cooter, Structural Adjudication and the New Law Merchant: A Model of De-
centralized Law , cit., p. 1662.
centralized Law , cit., p. 1663. See also M. E. Pricea, L. Cosmides, J. Tooby, Punitive
Sentiment as an Anti-Free Rider Psychological Device , in "Evolution and Human Beha-
vior", vol. 23, n. 3, 2002, pp. 203-23 1 (explaining that one function of punitive sentiments
could be to recruit labor for collective actions).
centralized Law, cit., p. 1667.
20
6.3 Law as a Coordinating Device
Both Ellickson's model and the theory of internalization of norms

are useful because they identify two important mechanisms that lead
to norm creation and enforcement. However, they still do not fully
demonstrate how- maintaining the assumption of rational choice the-
ory-rational self-interested group members conform to social nor-
ms in response to incentives created by themselves. Ellickson's model
explains how group members come to appreciate the advantages of
new social practices. However, the decision to conform to norms is
explained by informational and reputational cascades: people decide
to conform to the new norms because they rely on others' decisions
and because they want to avoid being socially marginalized. In com-
parison, the theory of norm internalization certainly captures a mecha-
nism that is powerful in generating conformity to social norms, but it
largely relies on arguments outside the explanatory domain of rational
choice theory. For the purposes of this study, an economic explanation
is needed of how self-interested individuals surmount the "coordina-
tion" and the "incentive" problems associated with norm creation and
enforcement.
Hadfield and Weingast40 recently proposed an insightful expla-
nation of the institutional mechanism that enables the members of a
community to reach and support a cooperative equilibrium through
collective punishment in the absence of a centralized coercive enfor-
cement body. Their model links the solution of both the coordination
and incentive problems to the structural attributes of law 41 . Here I
borrow some insights offered by this model to explain why the coope-
rative equilibrium supported by the existence of a norm is in some ca-
ses preferable for group members to the non-cooperative equilibrium
based on individual defection, despite the fact that a centralized enfor-
cement authority is absent.
It should first be recognized that in the absence of a centralized
authority ensuring that norm violations are met with an effective pu-
40 G. K. Hadfield, B. R. Weingast, What is Law? A Coordination Model of the Cha-

racteristics of Legal Order, in "Journal of Legal Analysis," vol. 4, n. 2, 2012.
41 G. K. Hadfield, B. R. Weingast, What is Law? A Coordination Model of the Cha-
racteristics of Legal Order, cit., p. 476 ("An important implication of our model is that it
provides a link between the attributes of legal order that many intuitively associate with
law and the resolution of the coordination and incentive problems that underpin effective
collective punishment").
21
nishment, people's preference for norm abidance is conditional in na-
ture. That is, the individual prefers conformity to violation if he or she
believes that (1) a sufficient number of other individuals conform to
the norm, and (2) a sufficient number of other individuals expect him
or her to conform to the norm, and they are willing to punish him or
her in case of violation42. Let me refer to these two distinct expecta-
tions as the "empirical expectation" (the others conform) and the "nor-
mative expectation" (the others expect conformity and are willing to
punish)43. In my understanding, Hadfield and Weingast's model de-
monstrates that individual participation in the collective enforcement
of norms reinforces the empirical and normative expectations of the
group members, thereby allowing the norms to exist. Let me clarify
this point by explaining how norms allow individuals to overcome the
problems of coordination and incentive.
First, norms work as a coordinating device because they provide
community members with a common logic for the identification and
classification of wrongful conduct44. Hence, the supply of a common
normative logic enables individuals to coordinate with each other in
collectively administering costly penalties to norm violators45. In fact,
the existence of a norm allows for "public and impersonal" reasoning,
based on the basis of which individuals can make simultaneous deci-
sions about whether to punish those who engage in non-cooperative
behaviours. In brief, norms solve the coordination problem by coordi-
nating individual expectations about how behaviours can be classified
for the purpose of the enforcement process.
Second, the enforcement of norms reinforces the expectations of
group members about the likelihood that the inefficient (non-coope-
rative) behaviour will be punished. That is, participating in collective
punishments allows group members to signal to potential norm viola-
tors that the inefficient behaviour is considered a wrongful act, and as
42 On this point, I draw from C. Bicchieri, The Grammar of Society: The Nature
and Dynamics of Social Norms, Cambridge, Cambridge University Press, 2006, pp. 8-28.
43 Here I use a simplified version of the more elaborate terminology introduced by
Bicchieri.
44 G. K. Hadfield, B. R. Weingast, What is Law? A Coordination Model of the
Characteristics of Legal Order, cit., p. 473 ("A normative classification scheme that desi-
gnates some actions as 'wrongful' (punishable, undesirable))".
45 G. K. Hadfield, B. R. Weingast, What is Law? A Coordination Model of the
Characteristics of Legal Order, cit., p. 479 ("A logic is an institution, not a disembodied
classification scheme").
22
such, it is punished according to the common normative logic establi-
shed by the norm. The enforcement of sanctions reinforces the empiri-
cal and normative expectations of potential wrongdoers (and therefore
their compliance), thereby raising the expected value of participating
in collective enforcement. This is the fundamental reason that self-in-
terested individuals are willing to incur the costs of inflicting punish-
ment, even when the costs of a single, inefficient behaviour does not
affect them personally: people have an incentive to participate in the
collective punishment, enabling them to affect other people's beliefs
about (1) the likelihood of punishment in case of violation, and (2) the
likelihood of enforcement by other group members. The act of enforce-
ment is an efficient signal to other group members that the equilibrium
based on the observance of the pattern of behaviour prescribed by the
common logic corresponds to each individual's private interest. Nor-
ms can work effectively as a coordinating and incentivizing device
because of their institutional characteristics as public and shared rules
of behaviour. In brief, the collective action problem exists, but it is
mitigated by the incentive to signal the efficiency of the cooperative
equilibrium.
7 . The Enforcement Costs
Norms emerge and persist over time if a critical number of en-

forcers enable a group to adopt a new norm (i.e., a critical number of
norm beneficiaries are willing to play the role of norm-producers).
If the number of enforcers does not reach the critical threshold, then
the community remains with the adoption of the existing norm. The
willingness of group members to participate in collective punishment
depends upon enforcement costs compared to the expected benefits of
enforced norms46. This section discusses the cost structure of norm
emergence and then the benefit structure of the spontaneous adaption
to new norms.
46 To clarify, I implicitly assume here that the marginal costs of participating in de-
centralized enforcement do not exceed the marginal costs of participating in other types
of collective law-making processes.
23
The number of actors taking part in the collective punishment of
norm violators is a negative function of the enforcement costs47. Let
me call the individuals that participate in the collective enforcement
process for any given existing level of enforcement cost "enforcing
actors" or "enforcers". Now assume that the marginal enforcement
cost (i.e., the enforcement cost bom by the marginal enforcer actor) is
a negative function of the number of infra-marginal enforcers48 .That
is, for every level of enforcement actors, there is a level of enforce-
ment costs that individuals must be willing to bear in order to partici-
pate in the enforcement process.
Now since (1) the number of infra-marginal actual enforcers de-
pends upon the marginal actual enforcement cost and (2) the marginal
actual enforcement cost depends upon the number of infra-marginal
actual enforcers, a circular, self-reinforcing, causal mechanism affects
the emergence of norms. In fact, a marginal increase in the number
of enforcement actors may reduce the marginal enforcement cost and
attract new enforcers, thereby triggering a self-reinforcing dynamic
that facilitates the spontaneous evolution of the norm49. However, the
same mechanism also can lead to and reinforce an evolutionary stall
because a marginal decrease in the number of enforcing actors can
trigger a circular self-reinforcing dynamic that reinforces a fall in the
number of enforcement actors50. Whether this self-reinforcing mecha-
nism facilitates or reduces the spontaneous emergence of a norm de-
pends upon (1) the elasticity of the number of the enforcement actors
with respect to enforcement costs, and (2) the elasticity of the enfor-
cement costs with respect to the number of enforcement actors. Some
centralized Law, cit., p. 1670
48 This is consistent with the fact that people's preference for cooperation is condi-
tional on other people's cooperative behaviour. Cooter makes the same assumption in R.
Cooter, Structural Adjudication and the New Law Merchant : A Model of Decentralized
Law , cit., pp. 1669-1675. In reality, the individual decision to participate in the enforce-
ment process depends upon the belief that (1) a sufficient number of other individuals
enforce the norm, and (2) a sufficient number of other individuals expect him or her to
enforce the norm.
49 If the number of enforcement actors increases, the marginal enforcement cost de-
creases; the lower the marginal enforcement costs are, the higher the number of enforce-
ment actors, which facilitates norm emergence and persistence over time.
50 If the number of enforcement actors decreases, the marginal enforcement cost
increases; the higher the marginal enforcement costs are, the lower the number of enfor-
cement actors, which impedes the evolution of the norms.
24
important factors determining both (1) and (2) are likely to be the cost
of information in the regulated environments and the receptiveness
of general audience members to new technical information. First, in
an environment where the costs of disseminating information among
group members are relatively low, it is easier for change actors to cre-
ate the conditions for a cascade toward a new norm. Close-knittedness
reduces the information costs, thereby increasing the elasticity of the
number of enforcing actors with respect to the enforcement costs. Se-
cond, the receptiveness of group members to new technical informa-
tion may depend on many factors. It is likely that the internalization
of norms increases the costs for change actors to challenge the status
quo and retards the propensity of group members to appreciate new
technical information51. Thus, in this latter respect, close-knit envi-
ronments characterized by strong norm internalization are likely to be
less adaptively efficient than those with weaker norm internalization
are. Another factor that undermines people's receptiveness to new te-
chnical information is that people are generally loss averse; they value
prospective losses and disadvantages more than they value prospecti-
ve gains and advantages.
8. Moving from a Local to a Global Optimum
One of the greatest obstacles to the spontaneous evolution of Pare-

to superior norms is associated with the costs of moving from a local
to a global optimum52. This type of evolutionary stall occurs when the
set of individual preferences is non-convex. When a preference set is
convex, a single peak represents the global optimum point; therefore,
each local improvement reduces the distance to the point of the global
maximum. That is, each local improvement leads to a global maxi-
mum. On the contrary, when a preference set is non-convex, there are
several peaks, each of which represents a local optimum with respect
to the local set of preferences, but only one is the global maximum (i.e.,

52 On this point, see R. Cooter, Structural Adjudication and the New Law Merchant:
A Model of Decentralized Law , cit., pp., 1687-1688; R. H. McAdams, The Origin , Deve-
lopment, and Regulation of Norms, in "Michigan Law Review," vol. 96, 1997, p.p. 409-
24; E. A. Posner, Law, Economics, and Inefficient Norms , cit., p.p. 171 1-1725; F. Parisi,
Toward a Theory of Spontaneous Law , cit. p. 215.
25
the efficient norm). This latter situation is highly problematic because
when the group moves away from the local optimum, it experiences
a decline in social welfare. If the group keeps moving away from the
local optimum, it will reach a point of increasing returns; beyond this
point, the move toward the efficient norm will be facilitated by the
increasing net benefits of the legal change. However, before reaching
the point of increasing returns, it is likely that many group members
who face immediate utility losses will abandon the group and decide
to adhere to the status quo (i.e., the local optimum).
An example of evolutionary stall caused by the difficulties of mo-
ving away from a local optimum is the transition of national states
toward the adherence to international measurement standards. The
adoption of international measurement standards generates efficiency
gains in the long run because it reduces the transaction costs associa-
ted with international commercial exchanges or transactions. Howe-
ver, abandoning the local measurement standards generates immediate
adaptation costs that individuals might be reluctant to sustain on a
voluntary basis. The process of legal integration among countries in
the European Union offers many examples of local rules that have be-
come inefficient with the increasing degree of integration53.
Conclusions
The environmental conditions under which spontaneous law-ma-

king constitutes an efficient source of law are summarized in the no-
tion of a close-knit environment, which includes (1) power reciprocity
among community members, (2) continuing relationships and a suffi-
ciently high discount-factor, (3) adequate knowledge and information
about the reputations of community members, and (4) actors' ability
to promptly punish defection. Structural reciprocity, which facilitates
the conditions for cooperation, is associated with environments cha-
racterized by role-reversibility. Reciprocity can also be institutionally
induced.
The process of the spontaneous emergence of law can be explai-
ned through the following three hypotheses: (1) change agents trigger
53 On this point see J. Niznik (ed.), The Normative Environment of European Inte-
gration. Social , Political and Cultural Obstacles to Compliance with European Norms ,
Warsaw, ins Publishers, 2008.
26
informational and reputational cascades converging toward the new
norm; (2) norm-internalization enables norm enforcement by overco-
ming collective action problems; and (3) legal rules supply a common
logic for the normative classification of wrongful conduct, thereby
operating as a coordinating device.
The norms created through spontaneous law-making suffer from
limitations rooted in the limited information and bounded rationality
of single individuals. In particular, spontaneous norms (1) can produce
negative externalities at the expense of group outsiders, (2) can fail to
evolve toward Pareto superior regimes because of evolutionary traps,
(3) can be manipulated by special interest groups, and (4) can evolve
toward inefficiency because of the bandwagon effect, as well as infor-
mational and reputational cascades.
In the absence of centralized coordinating devices, the possibili-
ty of overcoming evolutionary traps, such as those described above,
largely depends upon the group members' abilities to communicate
cheaply with one another and coordinate a collective move toward
the efficient legal regime. In these situations, centralized institutions
enjoy comparative advantages in terms of efficiency relative to sen.
Riassunto - Questo articolo si occupa tazionale e da una tempestiva sanzione dei

di evoluzione spontanea delle norme giuridi- comportamenti sleali.
che in assenza di istituzioni centralizzate che Tre meccanismi, in particolare, agevola-
producano il diritto. no tale evoluzione: (a) la presenza di agenti
La prospettiva concettuale dalla quale promotori del mutamento istituzionale, che
muove l'analisi è quella dell'efficienza del siano capaci di attivare "cascate informative"
diritto, intesa qui nel senso di superiorità che diffondano la conoscenza dei vantaggi
paretiana. In particolare, ci si propone di in- associati a standard normativi efficienti; (b)
dividuare: (1) le condizioni in presenza delle la diffusa "interiorizzazione" delle norme so-
quali è più probabile che il diritto spontaneo ciali o consuetudinarie da parte dei soggetti
evolva in modo efficiente; (2) i meccanismi comunitari, la quale rafforzi gli incentivi
sociali ed economici che facilitino l'emer- all'osservanza delle norme e ne riduca i co-
sione spontanea delle norme giuridiche; (3) sti di enforcement; (c) l'esistenza di incentivi
i vantaggi e gli svantaggi, in termini di effi- sociali a determinare e promuovere una co-
cienza della produzione spontanea del diritto, mune logica normativa di classificazione dei
rispetto a meccanismi centralizzati di produ- comportamenti sleali.
zione giuridica. Da ultimo sono ricordati i limiti di una
In gran parte l'analisi utilizza riferimenti concezione normativa fondata sulla evolu-
concettuali mutuati dalla "teoria dei giochi", zione spontanea del diritto. In questo senso,
concludendo che l'evoluzione spontanea di almeno tre fattori possono intaccarne l'effica-
norme efficienti è facilitata dalla presenza di cia: la manipolabilita'dei flussi d'informazio-
condizioni di simmetria di potere tra gli attori ne da parte di gruppi di pressione; gli elevati
sociali ed economici, da una loro interazio- costi di enforcement ; le difficoltà connesse
ne ripetuta nel tempo, da un'informazione alla transizione da punti di ottimo locale a
fondata su meccanismi sociali di tipo repu- punti di ottimo globale.
27

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THE EFFICIENCY OF THE SPONTANEOUS PRODUCTION OF NORMS

THE EFFICIENCY OF THE SPONTANEOUS

The issue of right or wrong arises only when cooperation is disturbed

Rudolf Dreikurs ( The Challenge of Marriage, 1946)

The purpose of this article is to assess the advantages and disadvan-

1 . The Spontaneous Emergence of Norms

Assume a social setting characterized by the following three con-

2. The Advantages of sen

It is useful to identify three groups of individual actors that are in-

1 This environmental setting corresponds largely to the one described in A. T. Kron-

3. The Disadvantages of sen

Having examined the advantages of spontaneous law, I now briefly

3 See F. Parisi, Toward a Theory of Spontaneous Law, in "Constitutional Political

Social Norms and Economic Theory , in "Journal of Economic Perspectives", n. 3, 1989,

The process of sen can be usefully conceptualized through the

5. The Conditions for the Efficient sen in pd Situations

I turn now to examine the environmental and institutional condi-

16 E. Ullmann-Margalit, The Emergence of Norms, Oxford, Clarendon Press,

Repeated game theory has long demonstrated that under appro-

18 See M. Taylor, Anarchy and Cooperation, Chichester, Wiley, 1976; M. Taylor,

22 F. Parisi, The Formation of Customary Law, Paper Presented at the 96 Annual

5.2 Role Reversibility

This section briefly examines two mechanisms that induce coope-

5.3 Reciprocity Constraints

Structurally asymmetric situations can be redressed through in-

28 F. Parisi, Theory of Spontaneous Law, cit., pp. 217-218.

6. The Process of sen

The identification of the conditions facilitating an efficient sen

6.1 Change Agents and Informational Cascades

The first question to confront concerns how self-interested indivi-

32 R. P. Merges, Contracting into Liability Rules: Intellectual Property Rights and

34 R. C. Ellickson, The Evolution of Social Norms: A Perspective from the Legal

6.2 Norm Internalization

Another explanation of the emergence of norms refers to the pro-

36 See E. Q. Campbell, The Internalization of Moral Norms, in "Sociometry," vol.

Both Ellickson's model and the theory of internalization of norms

40 G. K. Hadfield, B. R. Weingast, What is Law? A Coordination Model of the Cha-

7 . The Enforcement Costs

Norms emerge and persist over time if a critical number of en-

8. Moving from a Local to a Global Optimum

One of the greatest obstacles to the spontaneous evolution of Pare-

51 R. C. Ellickson, The Evolution of Social Norms: A Perspective from the Legal

The environmental conditions under which spontaneous law-ma-

Riassunto - Questo articolo si occupa tazionale e da una tempestiva sanzione dei

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