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Publié en 2020-08 Collection Sciences Po Economics Discussion Papers : 2020-08
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This paper studies discrimination in financial markets in the context of the “Dreyfus Affair” in 19th century France. The Affair originated from the wrongful conviction of a Jewish officer, Alfred Dreyfus, and revealed the depth of antisemitism in French society. We show that firms with Jewish board members experienced abnormal stock returns after several salient events of the Affair. However, in the long run, these firms experienced higher returns during the media campaign sparked by J’Accuse...!, a famous editorial that paved the way for Dreyfus’ rehabilitation. Our preferred interpretation is that media coverage of the Affair changed beliefs among antisemitic investors, allowing those who bet on Jewish-connected firms to capture excess returns through arbitrage. Our findings provide novel evidence on the existence of rents from discrimination and the economic impacts of antisemitism.

Publié en 2020-07 Collection Sciences Po Economics Discussion Papers : 2020-09
HJORT Jonas
IYER Vinayak
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Evidence suggests that firms in poor countries stagnate because they cannot access growth-conducive markets. We hypothesize that overlooked heterogeneity in marketing ability distorts market access. To investigate, we gave a random subset of Liberian firms vouchers for a week-long program that teaches how to sell to corporations, governments, and other large buyers. Firms that participate win about three times as many contracts, but only firms with access to the Internet benefit. We use a simple model and variation in online and offline demand to show evidence that this is because ICT dampens traditional information frictions, but not marketing barriers.

Publié en 2020-07 Collection Sciences Po Economics Discussion Papers : 2020-07
BEKKOUCHE Yasmine
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What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument which relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates’ vote share, both at British and French elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by far-right candidates has much lower returns than spending by other parties, and that this can be partly explained by the social stigma attached to far-right voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.

Publié en 2020-06 Collection Sciences Po Economics Discussion Papers : 2020-06
ZHURAVSKAYA Ekaterina
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Using an online randomized experiment in the context of the 2019 European elections campaign in France, we study how fact-checking affects sharing of false news on social media. We exposed over 4200 voting-age French to statements on the role of the EU made by the extreme right populist party Rassemblement National. A randomly selected subgroup of experiment participants was also presented with fact-checking of these statements; another subgroup was offered a choice whether to view the fact-checking or not. Then, all participants could choose whether to share the false statements on their Facebook pages. We show that: (i) both imposed and voluntary fact-checking reduced sharing of false statements by more than 25%; (ii) the size of the effect was similar between imposed and voluntary fact-checking; and (iii) each additional click required to share false statements reduced sharing by 75%.

in The Quarterly journal of economics Sous la direction de HARVARD UNIVERSITY Publié en 2020-05
BAZZI Samuel
KOEHLER-DERRICK Gabriel
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Why do religious politics thrive in some societies but not others? This paper explores the institutional foundations of this process in Indonesia, the world’s largest Muslim democracy. We show that a major Islamic institution, the waqf, fostered the entrenchment of political Islam at a critical historical juncture. In the early 1960s, rural elites transferred large amounts of land into waqf —a type of inalienable charitable trust—to avoid expropriation by the government as part of a major land reform effort. Although the land reform was later undone, the waqf properties remained. We show that greater intensity of the planned reform led to more prevalent waqf land and Islamic institutions endowed as such, including religious schools, which are strongholds of the Islamist movement. We identify lasting effects of the reform on electoral support for Islamist parties, preferences for religious candidates, and the adoption of Islamic legal regulations (sharia). Overall, the land reform contributed to the resilience and eventual rise of political Islam by helping to spread religious institutions, thereby solidifying the alliance between local elites and Islamist groups. These findings shed new light on how religious institutions may shape politics in modern democracies.

Publié en 2020-04 Collection Sciences Po Economics Discussion Papers : 2020-04
ALVIAREZ Vanessa
HEAD Keith
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We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4–7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU.

Publié en 2020-04 Collection Sciences Po Economics Discussion Papers : 2020-05
HERVELIN Jérémy
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In France, two years after school completion and getting the same diploma, the employment rate of apprentices is about 15 percentage points higher than that of vocational students. Despite this difference, this paper shows that there is almost no difference between the probability of getting a callback from employers for unemployed youth formerly either apprentices or vocational students. This result indicates that the higher employment rate of apprentices does not rely, in the French context, on better job access of those who do not remain in their training firms. The estimation of a job search and matching model shows that the expansion of apprenticeship has very limited effects on youth unemployment if this is not accompanied by an increase in the retention of apprentices in their training firm.

Publié en 2020-01 Collection Sciences Po Economics Discussion Papers : 2020-01
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This paper shows that a firm’s objectives can extend beyond profit maximization. I use data from a for-profit firm offering charity auctions of celebrities belongings whose donations affect both revenues and costs. Comparing actual donations with the profit-maximizing benchmark indicates that the firm donates in excess of profitmaximization. I provide additional evidence pointing to donations as a further objective of the firm. Also, donations do not substantially increase willingness to pay, indicating that demand cannot explain expenditures in CSR. My results shed light on the functioning of benefit corporations and open questions on the competitive conduct of non-profit maximizing companies.

Publié en 2020-01 Collection Sciences Po Economics Discussion Papers : 2019-17
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Using a nationally representative longitudinal survey of lawyers in the U.S., we document a sizeable gap between men and women in their early aspirations to become law firm partners, despite similar early investments and educational characteristics. This aspiration gap can explain a large part of the gender promotion gap that is observed later. We propose a model to understand the role of aspirations and then empirically test its predictions. We show that aspirations create incentives to exert effort and are correlated with expectations of success and the preference for becoming a partner. We further show that aspirations are affected by early work experiences—facing harassment or demeaning comments early in the career affects long-term promotion outcomes mediated via aspirations. Our research highlights the importance of accounting for, and managing, career aspirations as an early intervention to close gender career gaps.

Publié en 2019-12 Collection Sciences Po Economics Discussion Papers : 2020-02
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This paper presents, solves, and estimates the first structural auction model with seller selection. This allows me to quantify network effects arising from endogenous bidder and seller entry into auction platforms, facilitating the estimation of theoretically ambiguous fee impacts by tracing them through the game. Relevant model primitives are identified from variation in second-highest bids and reserve prices. My estimator builds off the discrete choice literature to address the double nested fixed point characterization of the entry equilibrium. Using new wine auction data, I estimate that this platform’s revenues increase up to 60% when introducing a bidder discount and simultaneously increasing seller fees. More bidders enter when the platform is populated with lower-reserve setting sellers, driving up prices. Moreover, I show that meaningful antitrust damages can be estimated in a platform setting despite this two-sidedness.

Publié en 2019-11 Collection Sciences Po Economics Discussion Papers : 2019-16
BOSQUET Clément
COMBES Pierre-Philippe
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Using an instrument based on a national contest in France determining researchers’ location, we find evidence of peer effects in academia, when focusing on precise groups of senders (producing the spillovers) and receivers (benefiting from the spillovers), defined based on field of specialisation, gender and age. These peer effects are shown to exist even outside formal co-authorship relationships. Furthermore, the match between the characteristics of senders and receivers plays a critical role. In particular, men benefit a lot from peer effects provided by men, while all other types of gender combinations produce spillovers twice as small.

Publié en 2019-11 Collection Sciences Po Economics Discussion Papers : 2019-15
WANG Hongming
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Pay-for-performance is commonly employed to improve the quality of social services contracted out to firms. We show that insurer responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the U.S. Medicare Advantage market, we find that high-quality insurance contracts responded to quality-linked payments by selecting healthier enrollees with premium differences across counties. The selection is profitable because the quality rating fails to adjust for pre-existing health differences of enrollees. As a result, quality improved mostly due to selection, and the supply of high-quality insurance shifted to the healthiest counties. Revising the quality rating could prevent these unintended consequences.

Publié en 2019-10 Collection Sciences Po Economics Discussion Papers : 2019-14
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The increase in wealth-to-income ratios in the second half of XXth century has recently received much attention. We decompose the trend in physical capital and housing, further decomposed into structures and land. In four out of five major countries analyzed, the positive trend in capital-income ratio arises from housing and specifically from its land component. We therefore revisit the question of wealth inequality and taxation in adopting a Georgist perspective (from Henry George, 1879) subsequently endorsed by prominent economists. We introduce land and housing structures in Judd’s optimal taxation framework. We show that an optimal taxation implies a property tax on land and no tax on capital. When the range of property taxes is politically constrained, taxing the product of housing rents is not optimal, even with additional taxes on "imputed rents". Rent taxes are however less distortive than a capital tax. The distortion depends on the share of housing structures and how they react to the tax on rents. However, a tax on rents complemented by a subsidy on structures investments in rental housing units does almost as well as a land tax. As a side result, we find that Judd’s result of no second best capital taxation extends to a larger range of parameters at the steady-state.

Publié en 2019-09 Collection Sciences Po Economics Discussion Papers : 2019-12
KOUTSOUGERAS Leonidas
SANTOS Manuel
XU Fei
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It is well known that in the presence of asymmetric information, adverse selection has detrimental effects on possible exchanges. We go a step further, and present a game-theoretic setup in which under such adverse selection effects there are uncertain benefits for bribing unknown players’ types (e.g., individuals, committees, or companies). A policy maker may then want to design indirect anti-corruption policies based on triggering failures for bribery attempts. In our stylized framework, we get a complete unraveling of bribes. This result can be extended to more complex environments under fairly mild conditions on players’ payoff functions.

Publié en 2019-07 Collection Sciences Po Economics Discussion Papers : 2019-11
LARREGUY Horacio
REID Otis
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We estimate the effects of one of the largest anti-vote-buying campaigns ever studied—with half a million voters exposed across 1427 villages—in Uganda’s 2016 elections. Working with civil society organizations, we designed the study to estimate how voters and candidates responded to their campaign in treatment and spillover villages, and how impacts varied with campaign intensity. Despite its heavy footprint, the campaign did not reduce politician offers of gifts in exchange for votes. However, it had sizable effects on people’s votes. Votes swung from well-funded incumbents (who buy most votes) towards their poorly-financed challengers. We argue the swing arose from changes in village social norms plus the tactical response of candidates. While the campaign struggled to instill norms of refusing gifts, it leveled the electoral playing field by convincing some voters to abandon norms of reciprocity—thus accepting gifts from politicians but voting for their preferred candidate.

Publié en 2019-07 Collection Sciences Po Economics Discussion Papers : 2019-10
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In this paper, we document the presence of “technology-induced” trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. We further find that the “sub-extensive” margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect.

Publié en 2019-06 Collection Sciences Po Economics Discussion Papers : 2019-09
BEKKOUCHE Yasmine
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What is the impact of campaign spending on votes? Does it vary across election types and across political parties? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that successfully deal with the endogeneity of campaign spending. We provide novel contributions in both of these areas. We build a new comprehensive dataset of all French municipal and legislative elections over the 1993-2014 period. We propose two new instruments to overcome the endogenous nature of campaign spending; they rely on the fact that candidates are differentially affected by regulation on campaign funding depending on the source of funding they depend on the most. We find that an increase in spending per voter consistently increases a candidate’s vote share both for municipal and legislative elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by extreme-right candidates has much lower returns than spending by other parties. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of the mechanisms at play.

Publié en 2019-06 Collection Sciences Po Economics Discussion Papers : 2019-13
MELNIKOV Nikita
ZHURAVSKAYA Ekaterina
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How does the internet affect government approval? Using surveys of 840,537 individuals from 2,232 subnational regions in 116 countries in 2008-2017 from the Gallup World Poll and the global expansion of 3G networks, we show that an increase in internet access reduces government approval and increases the perception of corruption in government. This effect is present only when the internet is not censored and is stronger when traditional media is censored. Actual incidents of corruption translate into higher corruption perception only in places covered by 3G. In Europe, the expansion of mobile internet increased vote shares of anti-establishment populist parties.

Publié en 2019-04 Collection Sciences Po Economics Discussion Papers : 2019-05
HERVÉ Nicolas
VIAUD Marie-Luce
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This paper documents the extent of copying and estimates the returns to originality in online news production. We build a unique dataset combining all the online content produced by French news media during the year 2013 with new micro audience data. We develop a topic detection algorithm that identifies each news event, trace the timeline of each story, and study news propagation. We unravel new evidence on online news production. First, we document high reactivity of online media: one quarter of the news stories are reproduced online in under 4 minutes. Second, we show that this comes with extensive copying: only 33% of the online content is original. Third, we investigate the cost of copying for original news producers. Using article-level variations and media-level daily audience combined with article-level social media statistics, we find that readers partly switch to the original producers, thereby mitigating the newsgathering incentive problem raised by copying.

Publié en 2019-04 Collection Sciences Po Economics Discussion Papers : 2019-06
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How does the exposure to past institutions affect current cooperation? While a growing literature focuses on behavioral channels, we show how cooperation-enforcing institutions affect rational learning about the group’s value. Strong institutions, by inducing members to cooperate, may hinder learning about intrinsic values in the group. We show, using a lab experiment with independent interactions and random rematching, that participants behave in accordance with a learning model, and in particular react differently to actions of past partners whether they were played in an environment with coercive enforcement or not.

Publié en 2019-04 Collection Sciences Po Economics Discussion Papers : 2019-07
MORROW John
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Multiproduct firms dominate production, and their product turnover contributes substantially to aggregate growth. Theories propose that multiproduct firms grow by diversifying into products which need the same know-how or capabilities, but are less clear on what these capabilities are. Input output tables show firms co-produce in industries that share intermediate inputs, suggesting input capabilities drive multiproduct production patterns. We provide evidence for this in Indian manufacturing: the similarity of a firm’s input mix to an industry’s input mix predicts entry into that industry. We identify the direction of causality from the removal of size-based entry barriers in input markets which made firms more likely to enter industries that were similar in input use to their initial input mix. We rationalize this finding with a model of industry choice and economies of scope to estimate the importance of input capabilities in determining comparative advantage. Complementarities driven by input capabilities make a firm on average 5% (and up to 15%) more likely to produce in an industry. Entry barriers in input markets constrained the comparative advantage of firms and were equivalent to a 10.5 percentage point tariff on inputs.

Publié en 2019-03 Collection Sciences Po Economics Discussion Papers : 2019-04
ABRAMS David
PHILIPPE Arnaud
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In this paper, we show that sentencing norms vary widely even across geographically close units. By examining North Carolina’s unique judicial rotation system, we show that judges arriving in a new court gradually converge to local sentencing norms. We document factors that facilitate this convergence and show that sentencing norms are predicted by preferences of the local constituents. We build on these empirical results to analyze theoretically the delegation trade-off faced by a social planner: the judge can learn the local norm, but only at the cost of potential capture.

Publié en 2019-03 Collection Sciences Po Economics Discussion Papers : 2019-03
NEVOUX Sandra
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This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers’ contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating.

Publié en 2019-02 Collection Sciences Po Economics Discussion Papers : 2019-02
RUEDA Valeria
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This article investigates the long-term historical impact of missionary activity on the prevalence of HIV/AIDS in sub-Saharan Africa. On the one hand, missionaries were among the first to invest in modern medicine in a number of countries. On the other hand, Christianity influenced sexual beliefs and behaviors. We build a new geocoded dataset locating Protestant and Catholic missions in the early 20th century, as well as their health investments. Using a number of different empirical strategies to address selection in missionary locations and into health investments, we show that missionary presence has conflicting effects on HIV today. Regions close to historical mission stations exhibit higher HIV prevalence. This negative impact is robust to multiple specifications accounting for urbanization, and we provide evidence that it is specific to STDs. Less knowledge about condom use is a likely channel. On the contrary, among regions historically close to missionary settlements, proximity to a mission with a health investment is associated with lower HIV prevalence nowadays. Safer sexual behaviors around these missions are a possible explanatory channel.

Publié en 2019-02 Collection Sciences Po Economics Discussion Papers : 2019-01
ACHARYA Viral
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This paper studies a model of the interest-rate channel of monetary policy in which a low policy rate lowers the cost of capital for firms thereby spurring investment, but also induces destabilizing “carry trades” against their assets. If the public sector does not have sufficient fiscal capacity to cope with the large resulting private borrowing, then carry trades and productive investment compete for scarce funds, and so the former crowd out the latter. Below an endogenous lower bound, monetary easing generates only limited investment at the cost of large and socially wasteful financial risk taking.

Publié en 2019-01 Collection Sciences Po Economics Discussion Papers : 2019-08
KOESSLER Frédéric
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This paper proposes an equilibrium concept, Language-Based Expectation Equilibrium, which accounts for partial language understanding in sender-receiver cheap talk games. Each player is endowed with a privately known language competence which represents all the messages that he understands. For the messages he does not understand, he has correct but only coarse expectations about the equilibrium strategies of the other player. In general, a language-based expectation equilibrium outcome differs from Nash and communication equilibrium outcomes, but is always a Bayesian solution. Partial language competence of the sender rationalizes information transmission and lies in pure persuasion problems, and facilitates information transmission from a moderately biased sender.

Publié en 2018-12 Collection Sciences Po Economics Discussion Papers : 2018-12
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This paper studies the prevalence of vertical market foreclosure using a novel dataset on U.S. and international buyer-seller relationships, and across a large range of industries. We find that relationships are more likely to break when suppliers vertically integrate with one of the buyers’ competitors than when they vertically integrate with an unrelated firm. This relationship holds also, among other things, when conditioning on mergers that follow exogenous downward pressure on the supplier’s stock prices, suggesting that reverse causality is unlikely to explain the result. In contrast, the relationship vanishes when using rumored or announced but not completed integration events. Firms experience a substantial drop in sales when one of their suppliers integrates with one of their competitors. This sales drop is mitigated if the firm has alternative suppliers in place.

Publié en 2018-12 Collection Sciences Po Economics Discussion Papers : 2018-09
BARRERA Oscar
ZHURAVSKAYA Ekaterina
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How effective is fact checking in countervailing “alternative facts,” i.e., misleading statements by politicians? In a randomized online experiment during the 2017 French presidential election campaign, we subjected subgroups of 2480 French voters to alternative facts by the extreme-right candidate, Marine Le Pen, and/or corresponding facts about the European refugee crisis from official sources. We find that: (i) alter- native facts are highly persuasive; (ii) fact checking improves factual knowledge of voters (iii) but it does not affect policy conclusions or support for the candidate; (iv) exposure to facts alone does not decrease support for the candidate, even though voters update their knowledge. We argue that the main channel is that fact checking increases the salience of the immigration issue.

Publié en 2018-12 Collection Sciences Po Economics Discussion Papers : 2018-12
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Contracting frictions affect the organization of firms, but how much does this matter on the aggregate level? This paper studies how costly supplier contract enforcement shapes the patterns of intermediate input use and quantifies the impact of these distortions on aggregate productivity and welfare. Using the frequency of litigation between US firms to measure the potential for hold-up problems, I find a robust relationship between countries’ input-output structure and their quality of legal institutions: in countries with high enforcement costs, firms have lower expenditure shares on intermediate inputs in sector pairs where US firms litigate frequently for breach of contract. I adapt a Ricardian trade model to the study of intersectoral trade, and show that the variation in intermediate input shares that is explained by contracting frictions is large enough to generate sizeable welfare increases when enforcement institutions are improved.

Publié en 2018-09 Collection Sciences Po Economics Discussion Papers : 2018-11
LOUIS-SIDOIS Charles
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Members of groups and organizations often have to decide on rules that regulate their contributions to common tasks. They typically differ in their propensity to contribute and often care about the image they project: in particular, they want to be perceived by other group members as being high contributors. In such environments we study, from both a positive and normative perspective, the interaction between the way members vote on rules and their subsequent contribution decisions. We show how endogenous norms can emerge. We study in particular the role played by the visibility of individual actions, votes or contributions. While making votes visible always increases welfare in our setting, making contributions public can be welfare decreasing as it makes some rules more likely to be rejected.

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