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Thursday, March 06, 2008

Cooperating with Strangers

Herbert Gintis on altruism:

Gintis' perspective piece in Science reveiws recent behavioral game theory research, EurekAlert: ...Modern democratic societies are associated with strong economic performance as well as numerous ills -- the decay of traditional family and ethnic ties, loss of community, inequality, and destruction of the environment.

In a Perspectives piece appearing in the March 7 issue of Science, ... Professor Herbert Gintis ... reviews recent behavioral game theory research by Herrmann, Thöni, and Gächter. Their paper ... strongly suggests that systematic differences across societies ... affect their capacity to cooperate effectively.

Using cooperative games, Herrmann et al. collected data in 15 countries with varying levels of economic development. They show that university students in democratic societies with advanced market economies rarely exercised a type of antisocial punishment featured in the game, while this behavior was commonly exercised by students in traditional societies based on authoritarian and parochial social institutions. The results suggest that the depiction of civil society as the sphere of naked self-interest is radically incorrect; rather, the success of democratic market societies may depend critically on individuals balancing self interest with morality.

“The authors’ empirical results show that the advanced market societies with democratic institutions produce an ethic of spontaneous cooperation, with a strong altruistic dimension, that likely accounts at least in part for their material success and legitimacy, says Gintis. ...

The article's introduction explains that although there appears to be a loss of community in large, developed societies relative to smaller, more traditional societies,  large, developed societies require more cooperation with strangers and hence more altruism:

Punishment and Cooperation, by Herbert Gintis, Science: Even champions of modern society agree that it involves a loss of community (based on family and ethnic ties) and an expansion of civil society, with emphasis on the more impersonal interactions among individuals with minimal social ties. ... On page 1362 of this issue, Herrmann et al. report ... that the success of democratic market societies may depend critically on moral virtues as well as material interests, so the depiction of civil society as the sphere of "naked self-interest" is radically incorrect.

The standard view holds that human nature has a private side in which we interact morally with a small circle of intimates and a public side in which we behave as selfish maximizers. Herrmann et al. suggest that most individuals have a deep reservoir of behaviors and mores that can be exhibited in the most impersonal interactions with unrelated others. This reservoir of moral predispositions is based on an innate prosociality that is a product of our evolution as a species, as well as the uniquely human capacity to internalize norms of social behavior. Both forces predispose individuals to behave morally even when this conflicts with their material interests. ...

Here are a few details of the experiment:

Herrmann et al. employ a public goods game in which each of four anonymous subjects is initially given 20 tokens, and each is told he can place any number of these tokens in a public account. The tokens in the account are multiplied by 1.6 and the result divided evenly among the four. At the end of the experiment, the tokens are exchanged for real money.

In this game, each individual helps the group most by placing his 20 tokens in the public account, and if all do so, each earns 32 tokens. However, if a single individual is selfish, he will place nothing in the public account, and his earnings will be ... 44 tokens. But, if all four are selfish, each earns only 20 tokens. Because the four subjects are strangers, the standard view of human nature suggests that there will be zero contributions. However, in the many times this game has been played in a variety of social settings, the older view is virtually never supported, and the average contribution is about half the initial endowment. ...

But then they add punishment to the game:

Each player A could specify that the player B associated with a particular contribution have three tokens deducted from his payoff, for each token deducted from A's payoff.

One type of punishment where the high contributors punish the low contributors inducing them to contribute more is called altruistic because it increases the payoff to the group as a whole, but it comes at a cost to the person meting out the punishment.

There is also another type of punishment called anti-social punishment. In this case, low contributors punish the high contributors inducing them to reduce both their future contributions and their future punishment of the low contributors. This reduces the overall payment to the group.

Which type of punishment prevails? As noted above, it differs across counties:

Herrmann et al. collected data in 15 countries with widely varying levels of economic development. The subjects were university students in all societies. The authors found that antisocial punishment was rare in the most democratic societies and very common otherwise. ...

The most likely explanation is that in more traditional societies, the experimental setup represents a clash of cultures. On the one hand, high payoffs in the experiment require the modern ethic of cooperation with unrelated strangers, so subjects who are reprimanded for low contribution are likely to respond with feelings of guilt and a resolve to be more cooperative in the future. In a more traditional society, many players may hold to the ethic of altruism and sacrifice on behalf on one's family and friends, with indifference toward unrelated strangers. When punished, such subjects are likely to respond with anger rather than guilt. Punishing the high contributors is thus a means of asserting one's personal values, which take precedence over maximizing one's payoff in the game.

    Posted by on Thursday, March 6, 2008 at 06:21 PM in Economics, Science | Permalink  TrackBack (0)  Comments (10)

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