Law : Framing or Equilibrium Selection ?

Besides creating fear of sanctions, laws sometimes express collective commitments, which can affect people’s behavior in at least two ways. First, a law can "frame" an act as wrong, so people avoid doing it for its own sake. Second, a law can help people coordinate their behavior by changing expectations. We hypothesize that normative systems have multiple equilibria and announcing a new law can help people select among them. We investigate these two effects experimentally in games with inter-dependent payoffs: a prisoner’s dilemma, a crowding game, and a coordination game. We simulate a law by telling subjects that one choice will result in a probabilistic "penalty". In the coordination game, announcing the penalty caused behavior to jump to the predicted equilibrium while it exhibited not effects in the prisoner’s dilemma or the crowding game. Our results suggest that law’s largest effects come from equilibrium selection, not framing or deterrence.