Moral Sentiments and Material Interests Economic Learning and Social Evolution General Editor Ken Binmore, Director of the Economic Learning and Social Evolution Centre, University College London Evolutionary Games and Equilibrium Selection, Larry Samuelson, 1997 The Theory of Learning in Games, Drew Fudenberg and David K Levine, 1998 Game Theory and the Social Contract, Volume 2: Just Playing, Ken Binmore, 1998 Social Dynamics, Steven N Durlauf and H Peyton Young, editors, 2001 Evolutionary Dynamics and Extensive Form Games, Ross Cressman, 2003 Moral Sentiments and Material Interests: The Foundations of Cooperation in Economic Life, Herbert Gintis, Samuel Bowles, Robert Boyd, and Ernst Fehr, editors, 2005 Moral Sentiments and Material Interests The Foundations of Cooperation in Economic Life edited by Herbert Gintis, Samuel Bowles, Robert Boyd, and Ernst Fehr The MIT Press Cambridge, Massachusetts London, England ( 2005 Massachusetts Institute of Technology All rights reserved No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher MIT Press books may be purchased at special quantity discounts for business or sales promotional use For information, please e-mail special_sales@mitpress.mit.edu or write to Special Sales Department, The MIT Press, 55 Hayward Street, Cambridge, MA 02142 This book was set in Palatino on 3B2 by Asco Typesetters, Hong Kong, and was printed and bound in the United States of America Library of Congress Cataloging-in-Publication Data Moral sentiments and material interests : the foundations of cooperation in economic life / edited by Herbert Gintis [et al.] p cm — (Economic learning and social evolution ; 6) Includes bibliographical references and index ISBN 0-262-07252-1 (alk paper) Cooperation Game theory Economics—Sociological aspects I Gintis, Herbert II MIT Press series on economic learning and social evolution ; v HD2961.M657 2004 330 01 5193—dc22 2004055175 10 To Adele Simmons who, as President of the John D and Catherine T MacArthur Foundation, had the vision and courage to support unconventional transdisciplinary research in the behavioral sciences Contents Series Foreword Preface xi ix I Introduction Moral Sentiments and Material Interests: Origins, Evidence, and Consequences Herbert Gintis, Samuel Bowles, Robert Boyd, and Ernst Fehr 41 II The Behavioral Ecology of Cooperation The Evolution of Cooperation in Primate Groups 43 Joan B Silk The Natural History of Human Food Sharing and Cooperation: A Review and a New Multi-Individual Approach to the Negotiation of Norms 75 Hillard Kaplan and Michael Gurven Costly Signaling and Cooperative Behavior 115 Eric A Smith and Rebecca Bliege Bird III Modeling and Testing Strong Reciprocity The Economics of Strong Reciprocity Ernst Fehr and Urs Fischbacher 151 149 viii Contents Modeling Strong Reciprocity 193 Armin Falk and Urs Fischbacher The Evolution of Altruistic Punishment 215 Robert Boyd, Herbert Gintis, Samuel Bowles, and Peter J Richerson Norm Compliance and Strong Reciprocity 229 Rajiv Sethi and E Somanathan IV Reciprocity and Social Policy 251 Policies That Crowd out Reciprocity and Collective Action 253 Elinor Ostrom 10 Reciprocity and the Welfare State 277 Christina M Fong, Samuel Bowles, and Herbert Gintis 11 Fairness, Reciprocity, and Wage Rigidity 303 Truman Bewley 12 The Logic of Reciprocity: Trust, Collective Action, and Law 339 Dan M Kahan 13 Social Capital, Moral Sentiments, and Community Governance 379 Samuel Bowles and Herbert Gintis Contributors Index 401 399 Series Foreword The MIT Press series on Economic Learning and Social Evolution reflects the continuing interest in the dynamics of human interaction This issue has provided a broad community of economists, psychologists, biologists, anthropologists, mathematicians, philosophers, and others with such a strong sense of common purpose that traditional interdisciplinary boundaries have melted away We reject the outmoded notion that what happens away from equilibrium can safely be ignored, but think it no longer adequate to speak in vague terms of bounded rationality and spontaneous order We believe the time has come to put some beef on the table The books in the series so far are: Evolutionary Games and Equilibrium Selection, by Larry Samuelson (1997) Traditional economic models have only one equilibrium and therefore fail to come to grips with social norms whose function is to select an equilibrium when there are multiple alternatives This book studies how such norms may evolve The Theory of Learning in Games, by Drew Fudenberg and David Levine (1998) John Von Neumann introduced ‘‘fictitious play’’ as a way of finding equilibria in zero-sum games In this book, the idea is reinterpreted as a learning procedure and developed for use in general games Just Playing, by Ken Binmore (1998) This book applies evolutionary game theory to moral philosophy How and why we make fairness judgments? Social Dynamics, edited by Steve Durlauf and Peyton Young (2001) The essays in this collection provide an overview of the field of social dynamics, in which some of the creators of the field discuss a variety 390 Bowles and Gintis communities in which home ownership is common exhibit much higher levels of ‘‘collective efficacy,’’ even after controlling for a large number of demographic and economic variables The most likely explanation is that home owners benefit fully from their neighborhood improvement interventions—not only from the improved quality of life, but from the enhanced value of their homes as well This interpretation is consistent with the fact that Sidney Verba and his collaborators (1995) found that controlling for a large number of demographic and other variables, U.S home owners are more likely to participate in local but not national politics, and with Edward Glaeser and Denise Depasquale’s (1999) findings in a sample of German individuals that changes in home ownership predict changes in levels of civic participation Finally, the plywood worker-owners’ success would be inexplicable were it not for the fact that as residual claimants on the income stream of the co-op, each individual owns the results of the others’ efforts As these examples suggest, in order to own the success of one’s efforts, community members must generally own the assets with which they work or whose value is affected by what the community does Second, as we have seen in the public goods with punishment experiments, the unraveling of cooperation that often afflicts communities can be averted if opportunities for mutual monitoring and punishment of noncooperators are built into the structure of social interactions Policies to increase the visibility of the actions of peers in communities, along with policies to enhance the effectiveness of forms of multilateral sanctioning of shirkers, may thus contribute to cooperative solutions to problems, even if a majority of members are selfinterested Huntergatherer bands that share food often practice the custom of eating in public, an effect of which is to make violations of the sharing rule evident to all The Toyama Bay fishers’ practice of offloading their catch at the same time likewise contributes to transparency in implementing their sharing rule An important feature of models in which cooperation in sizable groups is sustained by the punishment of shirkers is that multiple equilibria typically exist When cooperation is common, the costs incurred by civic-minded punishers is small, and they can easily persist in a population When cooperation is uncommon, those who punish shirkers will incur heavy costs and will likely be eliminated by any plausible evolutionary process (this volume, chapter 7) This suggests that a heterogeneous population with some civic-minded members Social Capital, Moral Sentiments, and Community Governance 391 (ready to punish those who violate norms) and some self-interested members may exhibit high or low levels of cooperation depending not on the distribution of types in the population, but rather on the recent history of the group There is a third desideratum for enhancing community governance The cases described in this chapter and hundreds like them suggest that well-working communities require a legal and governmental environment favorable to their functioning The Chicago residents’ success in reducing crime could hardly have been realized had the police not been on call The Japanese fishing co-ops numbering more than a thousand work within national and prefectural environmental and other regulations which they are free to complement by locally made rules, but not to override A comparison of Taiwanese and South Indian farmer-managed irrigation organizations shows that the greater success of the former is due to the effective intervention of national governments in providing a favorable legal environment and handling cases in which the informal sanctions of the community would not be adequate (Lam 1996; Wade 1988) Similar community-governmental synergy is found in Tendler’s study of the delivery of health care (1997) and Ostrom’s account of urban infrastructure (1996), both of which focus on Brazil The fact that governmental intervention has sometimes destroyed community governance capacities does not support a recommendation of laissez faire The face-to-face local interactions of community are thus not a substitute for effective government but rather a complement Neglect of this point no doubt explains some of the popularity of the social capital concept A Gallup Poll recently asked a large national sample of Americans ‘‘Which one of the following groups you think has the greatest responsibility for helping the poor: churches, private charities, the government, the families and relatives of poor people, the poor themselves, or someone else?’’ The survey also asked if inequalities in income and wealth were ‘‘acceptable’’ or ‘‘a problem that needs to be fixed.’’ While the sample was evenly split on the first question between the government on the one hand and all of the non-governmental responses on the other, those unconcerned about the level of inequality in the second question were almost three times as likely to support the private approach than the government solution (see this volume, chapter 10) Those favoring the social capital option in this case were seemingly more motivated by the fact that it would shrink government than by the hope that it would reduce inequality 392 Bowles and Gintis Thus, both a legal and governmental environment that complements the distinctive governance abilities of communities and a distribution of property rights that makes members the beneficiaries of community success are key aspects of policies to foster community problemsolving Developing an institutional structure such that states, markets, and communities are mutually enhancing is a challenging task, however For example, where property rights are ill-defined (and informal contractual enforcement is essential to mutually beneficial exchange), more precisely defined property rights may reduce the multifaceted and repeated nature of interpersonal contact on which community governance is based (Bowles and Gintis 1998) Similarly, there is considerable evidence that efforts to induce higher levels of work effort, compliance to norms, or environmental conservation by mobilizing self-interested motives through the use of fines and sanctions may undermine reciprocity and other social motives (see this volume, chapters and 9; as well as sources cited in Bowles 1998 and Bowles 2004) A fourth element in the community/good governance package: active advocacy of the conventional liberal ethics of equal treatment and enforcement of conventional anti-discrimination policies That it is not unrealistic to hope that communities can govern effectively without repugnant behaviors favoring ‘‘us’’ against ‘‘them’’ is suggested by the many examples of well-working communities that not exhibit the ugly parochial and divisive potential of this form of governance, including all of those above Other ways of empowering communities can be imagined, but some should be resisted on grounds that they heighten the difficult tradeoffs between good governance and parochialism mentioned in this chapter For example, Alesina and La Ferrara (2000) found that among United States localities, participation in church, local service and political groups, as well as other community organizations is substantially higher where income is more equally distributed, even when a host of other possible influences are controlled Their findings suggest that policies to increase income equality would enhance community governance But they also found that racially and ethnically diverse localities, measured by the probability that two randomly selected members of the population would be of different racial or ethnic groups, had significantly lower levels of participation One may hope that pro-community public policy would not seek to increase racial and ethnic homogeneity of groups for this reason Social Capital, Moral Sentiments, and Community Governance 393 But simply resisting government policies that homogenize is not sufficient If Alesina and La Ferrara’s results (and others like them) suggest that successful communities are likely to be relatively homogeneous, then a heavy reliance on community governance, in the absence of adequate counteracting policies, could promote higher levels of local homogeneity simply because the success of groups and their likely longevity will vary with how homogeneous they are Thus, a competitive economy in which worker-owned cooperatives are common is likely to exhibit more homogeneous workplaces than one made up of conventional firms The combination of within-group homogeneity and between-group competition, while effectively promoting some desirable forms of governance, seems a recipe for hostile ‘‘us versus them’’ sentiments Dilemmas such as this one are not likely to disappear 13.6 Economic Evolution and the Future of Community Governance The age of commerce and the dawn of democracy were widely thought to mark the eclipse of community Writers of all persuasions believed that markets, the state, or simply ‘‘modernization,’’ would extinguish the values that throughout history had sustained forms of governance based on intimate and ascriptive relationships According to the romanticist conservative Edmund Burke (1955[1790]) The age of chivalry is gone That of Sophisters, economists, and calculators has succeeded Nothing is left which engages the affection on the part of the commonwealth so as to create in us love, veneration, admiration or attachment The liberal Alexis de Tocqueville (1958[1832]) echoes Burke’s fears in this comment on democratic culture in America during the 1830s: Each [person] is a stranger to the fate of all the rest his children and his private friends constitute to him the whole of mankind; as for the rest of his fellow citizens, he is close to them but he sees them not he touches them but he feels them not; he exists but in himself and for himself alone For the socialists Karl Marx and Friedrich Engels (1972[1848], 475) The bourgeoisie has put an end to all feudal, patriarchal, idyllic relations It has pitilessly torn asunder the motley feudal ties that bound man to his ‘‘natural superiors,’’ and has left remaining no other nexus between man and man than naked self-interest [I]n place of the numberless indefeasible 394 Bowles and Gintis chartered freedoms, it has set up that single, unconscionable freedom—free trade Many who predicted the demise of community based their argument on the notion that communities owe their existence to a distinct set of pre-modern ‘‘values’’ that were bound to be extinguished by economic and political competition in markets and democratic states, or as Marx put it, by ‘‘the icy waters of egotistical calculation.’’ Modern writers have also stressed that the parochialism on which communities thrive requires cultural commitments that are antithetical to modern social institutions Talcott Parsons’ sociological system, to mention one prominent example, consistently attributes ‘‘particularistic’’ values to more primitive levels of civilization, and ‘‘universalistic’’ values to the more advanced Fred Hirsch refered to the waning of precapitalist moral codes in similar vein: This legacy has diminished with time and with the corrosive contact of the active capitalist values As individual behavior has been increasingly directed to individual advantage, habits and instincts based on communal attitudes and objectives have lost out (Hirsch 1976, 117–118) We not doubt that markets and democratic states represent cultural environments in which some values flourish and others wither Indeed, the dismay concerning their effects, expressed so long ago by Burke, Marx, and de Tocqueville, may have been prescient But the basis for the rise, fall, and transformation of communities, if we are correct, is to be sought not in the survival of vestigial values of an earlier age, but in the capacity of communities, like that of markets and states, to provide successful solutions to assist in solving contemporary problems of social coordination Far from being an anachronism, community governance appears likely to assume more rather than less importance in the future The reason is that the types of problems that communities solve, and which resist governmental and market solutions, arise when individuals interact in ways that cannot be regulated by complete contracts or by external fiat due to the complexity of the interactions or the private or unverifiable nature of the information concerning the relevant transactions These interactions arise increasingly in modern economies, as information intensive team production replaces assembly lines and other technologies more readily handled by contract or fiat and as difficult to measure services usurp the preeminent role, as both outputs and Social Capital, Moral Sentiments, and Community Governance 395 inputs, once played by measurable quantities like kilowatts of power and tons of steel In an economy increasingly based on qualities rather than quantities, the superior governance capabilities of communities are likely to be manifested in increasing reliance on the kinds of multilateral monitoring and risksharing exemplified in this chapter But the capacity of communities to solve problems may be impeded by hierarchical division and economic inequality among its members Many observers believe, for example, that the limited inequality between managers and workers in the standard Japanese firm is a key contributor to information sharing between management and production workers (Aoki 1988) Dayton-Johnson and Bardhan (2002) have found that farmer members of irrigation organizations in Tamil Nadu, India and Guanajuato, Mexico are more likely to cooperate in making efficient use of water if status and class inequalities among them are limited We survey other evidence as well as the theory underlying these comments in Baland, Bardhan, and Bowles (2002) and Bardhan, Bowles, and Gintis (2000) These results may reflect the same behavioral regularities underlying experimental results showing that cooperation in two-person non-repeated Prisoner’s Dilemma games declines dramatically when the degree of conflict of interest implicit in the payoff matrix increases (Axelrod 1970; Rapoport and Chammah 1965) If we are right that communities work well relative to markets and states where the tasks are qualitative and hard to capture in explicit contracts, and where the conflicts of interest among the members are limited, it seems likely that extremely unequal societies will be competitively disadvantaged in the future because their structures of privilege and material reward limit the capacity of community governance to facilitate the qualitative interactions that underpin the modern economy References Alesina, Alberto, and Eliana La Ferrara, 2000 ‘‘Participation in heterogeneous communities.’’ Quarterly Journal of Economics 115, 3: 847–904 Aoki, Masahiko, Information, Incentives, and Bargaining in the Japanese Economy Cambridge: Cambridge University Press, 1988 ———, and Yujiro Hayami, ‘‘Introduction,’’ in Masahiko Aoki and Yujiro Hayami (eds.), Communities and Markets in Economic Development Oxford: Oxford University Press, 2000 Arrow, Kenneth J., ‘‘Political and Economic Evaluation of Social Effects and Externalities,’’ in M D Intriligator (ed.), Frontiers of Quantitative Economics Amsterdam: North Holland, 1971, 3–23 396 Bowles and Gintis Axelrod, Robert, Conflict of Interest: A Theory of Divergent Goals with Applications to Politics Chicago: Markham, 1970 Baland, Jean Marie, Pranab Bardhan, and Samuel Bowles, Inequality, Cooperation and Environmental Sustainability New York: Russell Sage, 2005 Bardhan, Pranab, Samuel Bowles, and Herbert Gintis, ‘‘Wealth Inequality, Credit Constraints, and Economic Performance,’’ in Anthony Atkinson and Franc¸ois Bourguignon (eds.), Handbook of Income Distribution Dortrecht: North-Holland, 2000 Besley, Timothy, and Stephen Coate, ‘‘Group Lending, Repayment Incentives, and Social Collateral,’’ Journal of Development Economics 46 (1995): 1–18 Bowles, Samuel, ‘‘Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions,’’ Journal of Economic Literature 36 (March 1998): 75–111 ———, Microeconomics: Behavior, Institutions, and Evolution Princeton: Princeton University Press 2004 ——— and Herbert Gintis, ‘‘The Moral Economy of Community: Structured Populations and the Evolution of Prosocial Norms,’’ Evolution & Human Behavior 19,1 ( January 1998): 3–25 ———, in Erik Olin Wright (ed.), Recasting Egalitarianism: New Rules for Markets, States, and Communities London: Verso, 1999 Burke, Edmund, Reflections on the Civil War in France New York: Bobbs-Merrill, 1955(1790) Cohen, Dov, ‘‘Culture, Social Organization, and Patterns of Violence,’’ Journal of Personality and Social Psychology 75,2 (1998): 408–419 Craig, Ben, and John Pencavel, ‘‘Participation and Productivity: A Comparison of Worker Cooperatives and Conventional Firms in the Plywood Industry,’’ Brookings Papers: Microeconomics (1995): 121–160 Dayton-Johnson, J., and Pranab Bardhan, ‘‘Inequality and the Governance of Water Resources in Mexico and South India,’’ in Jean Marie Baland, Pranab Bardhan, and Samuel Bowles (eds.), Inequality, Cooperation and Environmental Sustainability New York: Russell Sage, 2002 de Tocqueville, Alexis, Democracy in America, Volume II New York: Vintage, 1958(1832) Dong, Xioa-yuan, and Gregory Dow, ‘‘Monitoring Costs in Chinese Agricultural Teams,’’ Journal of Political Economy 101,3 (1993): 539–553 Fukuyama, Francis, The Social Virtues and the Creation of Prosperity New York: Free Press, 1995 Ghemawat, Pankaj, ‘‘Competitive Advantage and Internal Organization: Nucor Revisited,’’ Journal of Economic and Management Strategy 3,4 (winter 1995): 685–717 Gintis, Herbert, Game Theory Evolving Princeton, NJ: Princeton University Press, 2000 Glaeser, Edward, David Laibson, Jose A Scheinkman, and Christine L Soutter, ‘‘Measuring Trust,’’ Quarterly Journal of Economics 65 (2000): 622–846 Glaeser, Edward L., and Denise DiPasquale, ‘‘Incentives and Social Capital: Are Homeowners Better Citizens?’’ Journal of Urban Economics 45,2 (1999): 354–384 Social Capital, Moral Sentiments, and Community Governance 397 Hansen, Daniel G., ‘‘Individual Responses to a Group Incentive,’’ Industrial and Labor Relations Review 51,1 (October 1997): 37–49 Hayami, Yujiro, ‘‘Community, Market and State,’’ in A Maunder and A Valdes (eds.), Agriculture and Governments in an Independent World Amherst, MA: Gower, 1989, 3–14 Hirsch, Fred, Social Limits to Growth Cambridge, MA: Harvard University Press, 1976 Homans, George, Social Behavior: Its Elementary Forms New York: Harcourt Brace, 1961 Hossain, M., ‘‘Credit for Alleviation of Rural Poverty: The Grameen Bank in Bangladesh,’’ International Food Policy Research Institute Report 65 1988 Jung, Courtney, ‘‘Community is the Foundation of Democracy: But What If Your Community Looks Like This?’’ Working paper, Yale University 1998 Kandel, Eugene, and Edward P Lazear, ‘‘Peer Pressure and Partnerships,’’ Journal of Political Economy 100,4 (August 1992): 801–817 Marc Knez and Duncan Simester, ‘‘Firm-Wide Incentives and Mutual Monitoring at Continental Airlines,’’ Journal of Labor Economics 19,4 (2001): 743–772 Lam, Wai Fung, ‘‘Institutional Design of Public Agencies and Coproduction: A Study of Irrigation Associations in Taiwan,’’ World Development 24,6 (1996): 1039–1054 Marx, Karl, and Friedrich Engels, ‘‘The Communist Manifesto,’’ in Robert Tucker (ed.), The Marx-Engels Reader, 2nd edition New York: W W Norton & Company, 1972(1848) Nisbett, Richard E., and Dov Cohen, Culture of Honor: The Psychology of Violence in the South Boulder, Westview Press, 1996 Ostrom, Elinor, Governing the Commons: The Evolution of Institutions for Collective Action Cambridge: Cambridge University Press, 1990 ———, ‘‘Crossing the Great Divide: Coproduction, Synergy, and Development,’’ World Development 24,6 (1996): 1073–1087 ———, ‘‘The Comparative Study of Public Economies,’’ Workshop in Political Theory and Policy Analysis: Center for the Study of Institutes, Population and Environmental Change, Indiana University 1997 Ouchi, William, ‘‘Markets Bureaucracies and Clans,’’ Administrative Sciences Quarterly 25 (March 1980): 129–141 John Pencavel, Worker Participation: Lessons from the Worker co-ops of the Pacific North-West New York: Russell Sage Foundation, 2001 Platteau, Jean-Philippe, and Erika Seki, ‘‘Community Arrangements to Overcome Market Failure: Pooling Groups in Japanese Fisheries,’’ in M Hayami and Y Hayami (eds.), Communities and Markets in Economic Development Oxford: Oxford University Press, 2001, 344–402 Rapoport, Anatol, and Albert Chammah, Prisoner’s Dilemma Ann Arbor: University of Michigan Press, 1965 Sampson, Robert J., Stephen W Raudenbush, and Felton Earls, ‘‘Neighborhoods and Violent Crime: A Multilevel Study of Collective Efficacy,’’ Science 277 (August 15, 1997): 918–924 398 Bowles and Gintis Schelling, Thomas C., Micromotives and Macrobehavior New York: W W Norton & Co., 1978 Scott, James, Seeing Like A State: How Certain Schemes to Improve the Human Condition Have Failed New Haven: Yale University Press, 1998 Tendler, Judith, Good Government in the Tropics Baltimore: Johns Hopkins Press, 1997 Tilly, Charles, ‘‘Charivaris, Repertoires and Urban Politics,’’ in John M Merriman (ed.), French Cities in the Nineteenth Century New York: Holmes and Meier, 1981, 73–91 Verba, Sidney, Kay Lehman Schlozman, and Henry Brady, Voice and Equality: Civic Voluntarism in American Politics Cambridge, MA: Harvard University Press, 1995 Wade, Robert, ‘‘Why Some Indian Villages Cooperate,’’ Economic and Political Weekly 33 (April 16 1988): 773–776 Whyte, William F., Money and Motivation New York: Harper & Row, 1955 Young, H Peyton, Individual Strategy and Social Structure: An Evolutionary Theory of Institutions Princeton, NJ: Princeton University Press, 1998 Contributors Truman Bewley, Professor of Economics, Yale University Rebecca Bliege Bird, Assistant Professor, Department of Anthropological Sciences, Stanford University Samuel Bowles, Research Professor and Director of the Behavioral Science Program, Santa Fe Institute and Professor of Economics, University of Siena Robert Boyd, Los Angeles Professor of Anthropology, University of California– Armin Falk, Institute for Empirical Research in Economics, University of Zu¨rich Ernst Fehr, head of the Institute for Empirical Research in Economics, University of Zu¨rich Urs Fischbacher, versity of Zu¨rich Institute for Empirical Research in Economics, Uni- Christina M Fong, Research Scientist, Department of Social and Decision Sciences, Carnegie-Mellon University Herbert Gintis, Emeritus Professor of Economics, University of Massachusetts and External Faculty, Santa Fe Institute Michael Gurven, Assistant Professor of Anthropology, University of California at Santa Barbara Dan M Kahan, Hillard Kaplan, Mexico Elinor Ostrom, Professor of Law, Yale Law School Professor of Anthropology, University of New Professor of Political Science, Indiana University 400 Contributors Peter J Richerson, Professor of Environmental Science and Policy, University of California at Davis Rajiv Sethi, Associate Professor of Economics, Barnard College, Columbia University Joan Silk, Angeles Professor of Anthropology, University of California–Los Eric A Smith, E Somanathan, Institute, Delhi Professor of Anthropology, University of Washington Associate Professor of Economics, Indian Statistical Index Adverse selection, 313, 317, 384 Altruism, 7–11, 22, 24, 25, 33, 34, 43, 45, 48, 50, 52, 60, 63, 69, 77, 79, 111–113, 125, 128, 129, 146–148, 154, 155, 215, 229, 282, 326, 339, 344, 386 Altruistic behavior, 5, 23, 34, 43, 45, 60 Altruistic punishment, 9, 12, 20, 24, 145, 215–219, 222, 223, 226 Anonymity, 11, 12, 15, 17, 26, 28, 184 Assortation/assortative interaction, 231, 238–240, 242, 243, 248 Attitudinal survey, 285 Axelrod, Robert, 7, 8, 34, 43, 52, 64, 126, 144, 184, 186, 215, 226, 248, 367, 374, 395, 396 Bargaining game, 210 Bounded rationality, 157 Bowles, Samuel, 3, 9–11, 22, 24, 25, 32, 35, 37, 95, 118, 120–122, 135, 141, 143, 145, 168, 187, 188, 215, 217, 218, 227, 249, 253, 271, 277, 298, 300, 367, 375, 379, 385, 386, 388, 392, 395, 396 Boyd, Robert, 3, 9, 22, 24, 25, 30, 31, 35, 37–39, 79, 80, 82, 95, 98, 107, 119, 122, 126, 128, 129, 135, 137, 138, 144, 145, 147, 215, 217–219, 225, 227, 248, 249, 367, 375 Bravery, 137 British Household Panel Study, 317 Broadcast efficiency, 123–125, 141 Byproduct mutualism, 77, 78 Capitalism, 142, 380, 389 Charity, 23, 127, 128, 146, 280, 284, 342, 367 Cheap talk, 174, 178 Coalition, 48, 54, 70–72, 103, 119 Collective action, 32, 79, 98, 109, 127, 134, 135, 142, 146, 147, 152, 157, 164, 183, 255, 259, 262, 263, 270, 339–345, 347–352, 355, 357, 358, 361, 364, 366, 367, 380 Collective good, 32, 116–142, 341, 342, 357, 366 Collusion, 164, 171 Common pool resource, 31, 32, 230, 231, 243, 248 Complete contracts, 394 Conditional cooperation, 154, 168, 253 Conditional reciprocity, 116, 117, 119, 126, 127, 129, 132, 136 Conformist transmission, 24 Consequentialist, 195, 197, 199, 200, 211– 213 Cooperation among nonkin, 23, 53, 79, 215 Costly signaling, 11, 31, 79, 80, 82, 85, 86, 98, 107, 112, 115, 117, 118, 120, 122, 129, 134, 135, 140, 143–145, 147 Crowding out, 20, 134, 186, 260, 268, 270, 344, 346 Cultural evolution, 9, 30, 31, 218, 219, 226 Cultural group selection, 9, 31, 141 Cultural norms, 27, 98 Dawkins, Richard, 7, 8, 35, 123, 145 de Waal, Frans, 43, 49, 54, 57–61, 63–67, 70, 73, 144 Decentralized sanctions, 233 Density-dependent competition, 217 Deserving poor, 168, 169, 294, 297 Distributional equity, 195, 202 Dictator game, 209, 253, 283, 284 Dominance hierarchy, 44, 49, 107 402 Dominant strategy, 118, 166, 169, 180, 342, 386 Double auction, 160–163 Economic incentives, 152, 155, 174, 175, 264 Efficiency wage, 163 Effort level, 13, 15, 161, 162, 174–178, 319– 323 Egalitarian redistribution, 32, 277 Enforcing cooperation, 134, 135 Equity, 136, 137, 168, 197, 207, 279, 307, 308, 310, 313, 317 Ethnographic data, 5, 29, 107, 116, 129, 136, 138, 215, 283 Evolution of cooperation, 47, 64, 72, 107, 144, 145, 219–223 Evolutionary puzzle, 215 Evolutionary stability, 24, 116, 121, 122, 128, 129, 135, 145, 216, 242, 248 Excess supply of labor, 161, 310, 319, 331 Experimental games, 6, 26, 28, 209 Explicit contract, 32, 177, 178, 395 External incentives, 340 Fairness, 19, 27, 29, 63, 136, 137, 152, 153, 156, 158, 160, 172, 174, 176, 182–184, 189, 193–195, 198, 200, 203, 204, 210, 211, 259, 265, 297, 303, 307–309, 320, 326, 327, 329–331 Falk, Armin, 10, 18, 36, 153, 154, 157, 160– 162, 172, 173, 181, 182, 184, 186–189, 193, 197, 202–204, 206, 207, 209, 211, 214, 248, 249, 319–322, 324, 333, 334, 368, 375 Fehr, Ernst, 3, 10, 13–18, 20, 21, 34, 36, 37, 151, 153, 154, 156, 157, 159–163, 166, 169, 170, 172–179, 182–188, 190, 197, 202–204, 210, 214, 248, 249, 257, 264, 265, 271, 273, 304, 319–324, 331, 333– 335, 367, 369, 375 Feldman, Marc, 9, 36, 370, 375 Fischbacher, Urs, 10, 18, 36, 151, 153, 154, 156, 157, 159, 160, 166, 169, 172, 173, 181, 182, 185–188, 193, 197, 202–204, 206, 207, 209, 211, 214, 248, 249, 324, 331, 333, 367–369, 375 Food sharing, 11, 23, 48, 55–57, 66, 75–77, 79, 80, 84, 86, 103, 107, 108, 111–113, 126, 127, 144 Free-rider, 15, 26, 97, 98, 126, 134, 139, 164, 166, 169–173, 186, 215, 216, 225, 260, 293, 341–347 Index Ga¨chter, Simon, 13–15, 17, 18, 20, 34, 36, 37, 157, 163, 166, 169, 170, 172, 174–176, 184, 185, 188, 189, 257, 271, 319, 321– 323, 331, 333, 334, 367, 369 Gains from cooperation, 97, 99, 102, 104, 105 Gallup Social Audit, 279, 285, 300 Game theory, 4, 193, 253, 255, 266, 385 Gene-culture coevolution, 9, 23, 24 Gift exchange, 156, 157, 161–163, 174, 182, 184, 209, 309, 312, 320 Gilens, Martin, 278, 279, 289, 293–296, 299, 300 Gintis, Herbert, 3, 9–11, 22, 24, 25, 32, 35, 37, 44, 67, 95, 108, 118, 120–122, 135, 141, 143, 145, 168, 187, 188, 209, 214, 215, 217, 218, 227, 248, 249, 270, 277, 298, 300, 367, 369, 375, 379, 385, 386, 392, 395, 396 Glaeser, Edward, 5, 37, 279, 300, 381, 390, 396 Gossip, 22, 86, 95, 99, 384 Grooming, 48, 52–55, 57, 64, 66–73, 140 Group extinction, 24, 31, 217, 219, 225 Group selection, 8–11, 23, 31, 34, 79, 80, 85, 105, 113, 115, 119, 122, 134, 137, 138, 145, 215, 217, 219, 221–226 Hamilton, William, 3, 7, 8, 34, 37, 43–45, 52, 64, 68, 79, 109, 126, 137, 144, 146, 184, 186, 215, 226, 248, 249 Hamilton’s Rule, 45, 48, 50, 84 Homo economicus, 3, 6, 193, 249, 282–284, 379–381 Honest signaling, 80, 117, 119, 120, 122, 131, 139, 140 Horticulturists, 27 Human peak net production, 89 Hunter-gatherers, 75–77, 88, 108–111, 126, 146 Hyper-fair offer, 28, 29 Implicit contract, 177, 178 Incentive compatibility, 102, 258 Incentive contracts, 177 Incentive effects, 279, 291 Inclusive fitness, 7, 43, 45 Incomplete contracts, 176 Indirect reciprocity, 82, 107, 128, 129, 145– 147 Inequity aversion, 152–155, 166, 185, 195, 202–204, 210, 211 Index Insiders, 163, 174, 296, 388 Intentions, 6, 18, 19, 33, 79, 139, 168, 182, 184, 194, 197–201, 206–208, 211, 212, 324, 329, 346, 365 Inter-group conflict, 137 Internalized norm, 15 Intrinsic motivation, 254, 259, 260, 263, 264, 267 Involuntary unemployment, 163, 173 Irrigation association, 261, 262 Joint ownership, 179, 180, 181 Kindness, 22, 194–197, 199–202, 204–209, 211, 212 Kinship, 43, 46, 47, 50, 52, 54, 63, 65, 69–71, 84, 98–100, 105 Labor market, 161, 173 Laibson, David, 37, 396 Local commons, 230, 243 Loewenstein, George, 5, 38, 197, 214, 284, 301 Lump-sum transfer, 176 Material payoff, 165, 193, 195, 210, 242, 253, 349 Maynard Smith, John, 8, 10, 38 Median voter model, 277 Migration, 23, 80, 215, 219, 226 Moonlighting game, 18, 19 Moral hazard, 174, 384 Moral sentiments, 32, 63, 98 Morale, 32, 306–310, 312, 314, 316–318, 324–331 Multilevel selection, 9, 34, 45, 73, 113, 138 Mutualism, 58, 78, 82, 125, 126 Nash equilibrium, 120, 122, 185 Natural selection, 30, 44, 79, 97, 117, 219, 226 Neoclassical economics, 3, 345, 389 NIMBY, 263, 352–355, 370, 376, 377 No shirking theory, 312 Nominal wage, 32, 304, 305, 314, 316 One-shot, 13, 25, 26, 63, 64, 125, 142, 152, 156–159, 161, 165, 172, 173, 177, 184, 203, 215, 256, 264 Organizational citizenship, 326–329 Ostracism, 22, 86, 169, 171, 185, 362 403 Ostrom, Elinor, 10, 15, 16, 20, 31, 38, 169, 171, 184, 189, 190, 248, 250, 253, 254, 257, 258, 260, 264, 266–269, 271–275, 368, 377, 381, 386, 389, 391, 397 Outsiders, 163, 174, 296, 384, 388 Parochialism, 231, 238, 240, 242, 243, 248, 392, 394 Pastoralist, 142 Peer pressure, 169, 386 Performance incentives, 174–176, 264, 305 Piece rates, 307 Positive reciprocity, 155, 212, 213, 318, 362 Price, George, 9, 38 Price’s Equation, Primate, 11, 44, 46–48, 51, 52, 59–61, 63– 65, 67, 72, 73 Principal-agent model, 176, 298 Property rights, 152, 179, 182, 183, 363, 379, 380, 382, 389, 392 Prosocial norms, 27, 30 Public Agenda, 294, 295, 300 Public goods game, 15–18, 118, 169, 170, 173, 186, 202–204, 209, 211 Punishing defectors, 37, 134, 135, 195, 204, 205, 211, 216, 219, 222–224, 226, 227, 346 Punishment condition, 18, 170 Rational behavior, 152, 259 Rational egoist, 253, 254, 259, 263, 265 Real wage, 310, 14, 18, 24, 27, 30, 32, 129, 143, 155, 164, 165, 169, 229, 230, 231, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 248, 253, 254, 259, 265, 341, 342, 345, 346, 347, 348, 349, 353, 354, 357, 359, 364, 366, 385, 387 Relatedness, 7, 26, 45, 48, 65, 79, 98 Relationship specific investment, 179 Repeated game, 156, 171, 184 Repeated interaction, 8, 94, 118, 152, 153, 156, 157, 171, 215 Reproductive success, 46, 47, 94, 146, 147 Resource regime, 268 Retaliation, 202–204, 211, 346, 347, 358, 386 Revenge, 23, 61, 71, 145 Risk-neutrality, 175, 178 Rule-of-thumb behavior, 156 Sanctioning behavior, 172, 248 Scrounging, 78, 107 404 Self-interest, 3, 7, 11, 25, 30, 32, 33, 94, 95, 153, 156, 157, 160–162, 165, 171, 174, 176, 178, 180, 181, 183, 184, 230, 232, 243, 254, 257–259, 261, 270, 278, 279, 282, 285–291, 293, 299, 364, 366, 381, 386, 391, 392, 393 Self-interest hypothesis, 151, 152, 158, 165, 169, 170, 173, 183 Self-regarding, 6, 8, 10, 12–17, 19, 21, 22, 25, 27, 32, 33, 230, 277, 282 Sharing norms/systems, 76, 78, 99, 102, 103 Shirking, 175, 177, 186, 264, 315–317, 322, 323, 339, 341, 345 Signaling costs, 11, 117, 143 Small-scale societies, 9, 22, 27, 75, 76, 96, 137, 218, 219 Smith, Adam, 3, 4, 39, 384 Sober, Eliot, 9, 39, 215, 227 Social dilemma, 27, 165, 166, 169, 195, 253, 259 Social dominance, 29, 118, 138 Social policy/public policy, 4, 11, 31, 32, 167, 266, 267, 270, 339, 347, 389, 392 Social preferences, 151–153, 155, 157, 184 Spiteful/envious preferences, 154, 155, 184, 189, 214 Stake size, 156 Standing model, 128, 147, 293, 297 Strategic sanctions, 172, 173 Strong reciprocity, 8–12, 14, 17, 18, 20, 22– 25, 27, 30–32, 34, 44, 61, 63, 64, 115, 125, 134, 136, 151–156, 158, 161, 163, 164, 166, 168, 174, 176, 177, 179, 180–184, 194, 229–231, 238, 242, 243, 282, 283, 285, 293, 294, 341–344, 349, 350, 357, 362–366, 382 Structured populations, 242, 248 Tax evasion, 32, 261, 347, 349, 362 The Edda, 277, 300 Tolerated theft, 78–82, 86, 106, 107, 113, 126 Trait-group selection, 80, 81, 86 Trivers, Robert, 3, 7, 8, 39, 43, 52, 73, 76, 113, 126, 138, 148, 184, 190, 215, 227 Trust game, 21, 253, 263, 264 Ultimatum game, 11, 12, 22, 27–29, 156– 160, 162, 182, 184, 186, 194, 198, 201– 203, 209, 211, 253, 321 Unconditional altruism, 9, 45, 154, 155, 381 Index Unconditional generosity, 116, 132, 137, 141 Unconditional sharing, 131, 133 Wage differentials, 163 Wage formation, 162 Wage rigidity, 303, 304, 306, 310–313, 315– 317, 320, 321, 331 Warfare, 31, 137, 138, 144–147, 171, 217, 396 Welfare recipient, 280, 284, 292, 295, 296 Welfare state, 167, 277, 279, 282, 293, 295, 296, 297 Wilson, David Sloan, 45, 73, 79, 80, 113, 215, 227 Wilson, Edward, 7, 9, 38, 39 World Values Survey, 279 Zahavi, Amos, 79, 113, 115, 116, 118, 140, 148 [...]... considers the willingness to subordinate self-interest to the needs of the social group to be part of human nature Another, favored by economists and biologists, treats cooperation as the result of the interaction of selfish agents maximizing their long-term individual material interests Moral Sentiments and Material Interests argues that a significant fraction of people fit neither of these stereotypes Rather,... player’s intentions could not be deduced They provide clear and unambiguous evidence for the behavioral rele- Moral Sentiments and Material Interests 19 vance of intentions in the domain of both negatively and positively reciprocal behavior The moonlighting game consists of two stages At the beginning of the game, both players are endowed with twelve points At the first stage player A chooses an action a in. .. ten The subjects are told the total number of rounds and all other aspects of the game and are paid their winnings in real money at the end of the session In each round, each subject is grouped with several other subjects—say three others—under conditions of strict anonymity Each subject is then given a certain number of ‘‘points,’’ say twenty, 16 Gintis, Bowles, Boyd, and Fehr redeemable at the end of. .. which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.’’ His book is a thorough scrutiny of human behavior with the goal of establishing that ‘‘sympathy’’ is a central emotion motivating our behavior towards others The ideas presented in this book are part of a continuous line of intellectual inheritance... precommitting to impose a fine of four MUs on the responder should the latter return less than the investor’s desired return At the time the investor chooses the transfer and the desired return, he also must specify whether to impose the fine condition The responder then knows the transfer, the desired return, and whether the fine condition was imposed by the investor Since all the interactions in this... behaviors, giving precise empirical content to a common intuition that the greater the cost of generosity to the giver and the less the benefit to the recipient, the less generous is the typical experimental subject (Andreoni and Miller 2002).1 The resulting ‘‘supply function of generosity,’’ and other estimates made possible by experiments, are important in underlining the point that otherregarding behaviors... only about the fairness of the outcomes and not intentions, there will be no difference in the behavior of the B players across the I- and the NI-treatments Moreover, if the A players believe their B partners care only about outcomes, their behavior will not differ across the two treatments If the B players care only about the intentions of their A partners, they will never reward or punish in the NI-treatment,... Walker, and Gardner Moral Sentiments and Material Interests 17 (1992), subjects interacted for twenty-five periods in a public goods game By paying a ‘‘fee,’’ subjects could impose costs on other subjects by ‘‘fining’’ them Since fining costs the individual who uses it, and the benefits of increased compliance accrue to the group as a whole, assuming agents are self-regarding, no player ever pays the fee,... self-regarding, they will all choose b ¼ 0, neither rewarding nor punishing their A partners, since the game is played only once Knowing this, if the As are self-regarding, they will all choose a ¼ À6, which maximizes their payoff In the I-treatment, A players are allowed to choose a, whereas in the NI-treatment, A’s choice is determined by a roll of a pair of dice If the players are not self-regarding and. .. twenty points to the common account, each of the four group members will receive eight points at the end of the round In effect, by putting her or his whole endowment into the common account, a player loses twelve points but the other three group members gain a total of twenty-four (¼ 8 Â 3) points The players keep whatever is in their private accounts at the end of each round A self-regarding player