Secret Santa: Anonymity, Signaling, and Conditional Cooperation
David Hugh-Jones and David Reinstein
July 24, 2009
Abstract:
Costly signaling of commitment to a group has been proposed as an explanation for
participation in religion and ritual. But if the signal’s cost is too small, freeriders will
send the signal and behave selfishly later. Effective signaling may then be prohibitively
costly. If the average level of signaling in a group is observable, but individual effort
is not, then freeriders can behave selfishly without being detected, and group members
will learn about the average level of commitment among the group. We develop a formal
model, and give examples of institutions that enable anonymous signaling, including
ritual, religion, music and dance, voting, charitable donations, and military institutions.
We explore the value of anonymity in the laboratory with a repeated two-stage public
goods game with exclusion. When first-stage contributions are anonymous, subjects are
better at predicting second-stage behavior, and maintain a substantially higher level of
cooperation.