Evil Social Institutions
Abstract: The purpose of this paper is to introduce the concept of evil social institutions: rules that shape human interactions just like other social institutions but which actively incite social conflict by explicitly condoning socially destructive behavior. They are presented as an additional (and more radical) reason for the endurance of social conflict and underdevelopment in a given community besides other forms of perverse institutions. These institutions do not even intend to protect property rights, albeit unfair ones, but put them willingly at risk. To empirically prove their existence, rigidity, and economic relevance the paper conducts behavioral and institutional research in the virtual world of the online video game “EVE Online”. Thanks to collaboration with the game’s developer, the empirical part can build on data that encompasses practically everything the 390,000 players did in the month of January 2011. Thus, it can build on rich and objective empirical evidence about economic behavior in a natural state from a highly controllable environment; something difficult to achieve in real world or laboratory conflict settings.
