Insiders, outsiders, and the adaptability of informal rules to ecological shocks

The history of the world is strewn with the remains of societies whose institutions failed to adapt to ecological change, but the determinants of institutional fragility are difficult to identify in the historical record. We report a laboratory experiment exploring the impact of an exogenous ecological shock on the informal rules of property and exchange. We find that geographically-induced tribal sentiments, which are unobservable in the historical record, impede adaptation post shock and that inequality declines as wealth and sociableness increase. Quantitative measures of individual and group sociality account for some of the differences in successful or failed adaptation.

► This experiment explores the impact of an unanticipated ecological shock on informal rules of property and exchange. ► We compare the shock's impact in two geographies - one of which is designed to induce strong in- and out-group sentiments. ► Such sentiments sharply diminish the ability to cope effectively with the shock, leading to poor resource management. ► Measures of individual and group-level social engagement indicate that sociality contributes significantly to performance. ► Inequality is inversely related to the amount of wealth generated and quantitatively measured sociality.