Preprints of the Max Planck Institute for Research on Collective Goods 2013/21
Contract Governance, as it seems, examines a set of rather different regulatory constellations. In the analysis of these, fairness or reciprocity would be of relevance in quite different ways that cannot be pursued here. Instead, I take governance for the purpose of this article in a narrower and at the same time more general meaning that cuts across the different forms of Contract Governance. In the following, I understand governance to be occupied (among other things) with problems of cooperation or opportunistic behaviour, in which mutually beneficial outcomes are not realized because actors have an incentive to deviate from cooperation or, put differently, in which the efficient outcome is not an equilibrium. The canonical model for this type of social problems is, of course, the Prisoner´s Dilemma, but in fact cooperation problems take a variety of forms that pose different problems, for the analysis of which a multitude of more sophisticated and more adequate models are being applied. The following article is interested in the role of fairness or reciprocity in solving problems of this sort and it focuses more on general mechanisms than on specific results (whose external validity has to be considered with caution and care).