non-reciprocation regardless of whether the norm violator or the victim of the violation has low-
or high-caste status.
Since contracts involve the mutual reciprocation of favours, an immediate potential
implication of this finding is that low castes may be generally less willing to enforce contracts
through altruistic sanctioning. Previous evidence (Fehr, Kirchsteiger and Gachter 1997) indicates
that altruistic sanctioning is a powerful means of enforcing contracts. A lower willingness to
sanction contract violations may thus render the low castes less able to exploit gains from trade
because they are less protected - via lower altruistic punishment - from contract violations. In
addition, if the lower willingness to punish contract violations is more generally associated with
a lower propensity to punish free-riders in collective action, then the low castes would be less
able to discipline free-riders and thus to organize collective action. This reduced ability for
collective action might have consequences for their ability to improve their status through
political means. Taken together, this chain of arguments might mean that the caste system exerts
a self-perpetuating influence on social preferences that renders the low castes less able to change
the caste system. The endogeneity of the willingness to sanction altruistically thus may be part of
a vicious circle that contributes to societal rigidity.
3.2. The Potential Role of Endogenous Preferences in Group Conflicts
One reason why violent conflicts between groups and societies are often so difficult to end is that
in the process of war, preferences may change. Voors et al. (forthcoming) show that the intensity
of civil war has a significant impact on time, risk and social preferences. Individuals in Burundi
who happen to live in regions with higher levels of violence are more risk-seeking and less
patient in a preference elicitation experiment. In addition, the individuals in those violent regions
are more altruistic towards each other. These findings are robust to controls for a wide range of
household and community characteristics, including the application of plausible instrumental
variables. Likewise, Gneezy and Fessler (2011) provide experimental evidence that during the
recent war between Israel and Hezbollah, individuals were more willing to sanction others for
greedy behaviour, or to reciprocate generous acts, than these populations had been nine months
before the war, or were one year after the war. Bauer et al. (2011) conducted an experiment with
children that shows that those children who were more affected by warfare during the conflict
between Russia and Georgia display more altruism towards in-group members. Note that these
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