Besides deterring people, laws may affect behavior by changing preferences or beliefs. A law may elicit intrinsic motivation by framing an act as wrong. Alternatively, it may coordinate the behavior of different people by changing their beliefs about what others will do. We investigate framing and coordination effects experimentally in prisoner's dilemma, "crowding" and coordination games. We simulate a law by imposing a probabilistic penalty on one of the choices. In the prisoner's dilemma and the crowding game, announcing the penalty had no effect. In the coordination game, announcing the penalty caused behavior to jump to the Pareto-superior equilibrium. Keywords: Equilibrium selection, framing, expressive law, experiments, coordination, prisoner's dilemma. JEL codes C72, C91, K42
Bohnet, Iris, and Robert Cooter. "Expressive Law: Framing or Equilibrium Selection?" KSG Faculty Research Working Papers Series RWP03-046, November 2003.