Michihiro Kandori's paper, "Social Norms and Community Enforcement," published in *The Review of Economic Studies*, explores how informal enforcement mechanisms, such as social norms and community sanctions, can sustain cooperation in economic transactions where agents change partners over time. The paper extends the theory of self-enforcing agreements in repeated games to the context of matching games, where agents are matched with different partners in each period. Key findings include: 1. **Community Enforcement and Personal Enforcement**: Under perfect observability, community enforcement works similarly to personal enforcement, where cooperation can be sustained even when agents only observe their personal experiences. 2. **Contagious Equilibrium**: In scenarios with limited observability, a "contagious equilibrium" can sustain cooperation through a contagious process of defection, where a single defection can lead to widespread cheating. 3. **Folk Theorem with Local Information Processing**: Under mild assumptions, a Folk Theorem holds when agents carry labels (e.g., reputation, membership) that are revised systematically. This allows for the sustainability of any mutually beneficial outcomes in infrequent transactions. The paper also discusses the importance of information transmission and the robustness of equilibria, emphasizing that simple and robust mechanisms can be effective in sustaining cooperation. The analysis is grounded in economic theory, focusing on how self-interested agents can sustain social norms through decentralized information processing and local decision-making.Michihiro Kandori's paper, "Social Norms and Community Enforcement," published in *The Review of Economic Studies*, explores how informal enforcement mechanisms, such as social norms and community sanctions, can sustain cooperation in economic transactions where agents change partners over time. The paper extends the theory of self-enforcing agreements in repeated games to the context of matching games, where agents are matched with different partners in each period. Key findings include: 1. **Community Enforcement and Personal Enforcement**: Under perfect observability, community enforcement works similarly to personal enforcement, where cooperation can be sustained even when agents only observe their personal experiences. 2. **Contagious Equilibrium**: In scenarios with limited observability, a "contagious equilibrium" can sustain cooperation through a contagious process of defection, where a single defection can lead to widespread cheating. 3. **Folk Theorem with Local Information Processing**: Under mild assumptions, a Folk Theorem holds when agents carry labels (e.g., reputation, membership) that are revised systematically. This allows for the sustainability of any mutually beneficial outcomes in infrequent transactions. The paper also discusses the importance of information transmission and the robustness of equilibria, emphasizing that simple and robust mechanisms can be effective in sustaining cooperation. The analysis is grounded in economic theory, focusing on how self-interested agents can sustain social norms through decentralized information processing and local decision-making.