The Moral Economy of Communities

Evolution and Human Behavior, 1997

Why do communities persist despite their inability t o exploit the eciency-enhancing properties of markets and the advantages of universal enforcement of rules provided by states? One reason is the capacity of communities to foster cooperative behavior.

The Heythrop Journal, 2016

Scientific Reports

Cooperation in social dilemmas can be sustained if individuals are effectively rewarded or punished from peers within the group. However, as group size increases, we inevitably face localization, in which a global group is divided into several localized groups. in such societies, members can reward and punish only neighbors within the same localized group, while cooperation for social dilemmas should be solved through global group involvement. in this situation, the global group and the local group are not always equal in terms of welfare, and situations can arise in which cooperation is beneficial for the global group but not for the local group. We predict that in such a locally inefficient situation, peer reward and punishment cannot function to sustain global cooperation. We conducted an experiment in which 16 group members played a public goods game incorporating peer reward and punishment. We manipulated the range of peer reward and punishment (only local members/all global members) and payoff structure (locally efficient/locally inefficient). We found that high cooperation was not achieved and that peer reward and punishment did not function when, and only when, the group was divided into localized groups and the payoff structure was locally inefficient.

PLoS ONE

In the recent literature, several hypotheses have been offered to explain patterns of human behavior in social environments. In particular, these patterns include ‘prosocial’ ones, such as fairness, cooperation, and collective good provision. Psychologists suggest that these prosocial behaviors are driven not by miscalculations, but by salience of social identity, in- group favoritism, emotion, or evolutionary adaptations. This paper imports psychology scholarship into an economic model and results in a sustainable solution to collective action problems without any external enforcement mechanisms. This natural mechanism of public goods provision is created, analyzed, and observed in a controlled laboratory environment using experimental techniques.

PLOS Computational Biology, 2016

Indirect reciprocity, besides providing a convenient framework to address the evolution of moral systems, offers a simple and plausible explanation for the prevalence of cooperation among unrelated individuals. By helping someone, an individual may increase her/his reputation, which may change the predisposition of others to help her/him in the future. This, however, depends on what is reckoned as a good or a bad action, i.e., on the adopted social norm responsible for raising or damaging a reputation. In particular, it remains an open question which social norms are able to foster cooperation in small-scale societies, while enduring the wide plethora of stochastic affects inherent to finite populations. Here we address this problem by studying the stochastic dynamics of cooperation under distinct social norms, showing that the leading norms capable of promoting cooperation depend on the community size. However, only a single norm systematically leads to the highest cooperative standards in small communities. That simple norm dictates that only whoever cooperates with good individuals, and defects against bad ones, deserves a good reputation, a pattern that proves robust to errors, mutations and variations in the intensity of selection.

Journal of Economic Dynamics …, 2007

We study the formation of social networks that are based on local interaction and simple rule following. Agents evaluate the profitability of link formation on the basis of the Myerson-Shapley principle that payoffs come from the marginal contribution they make to coalitions. The NP-hard problem associated with the Myerson-Shapley value is replaced by a boundedly rational 'spatially' myopic process. Agents consider payoffs from direct links with their neighbours (level 1) which can include indirect payoffs from neighbours' neighbours (level 2) and up to M-levels that are far from global. Agents dynamically break away from the neighbour to whom they make the least marginal contribution. Computational experiments show that when this selfinterested process of link formation operates at level 2 neighbourhoods, agents selforganize into stable and efficient network structures that manifest reciprocity, equity and segregation reminiscent of hunter gather groups. A large literature alleges that this is incompatible with self-interested behaviour and market oriented marginality principle in the allocation of value. We conclude that it is not this valuation principle that needs to be altered to obtain segregated social networks as opposed to global components, but whether it operates at level 1 or level 2 of social neighbourhoods. Remarkably, all M>2 neighbourhood calculations for payoffs leave the efficient network structures identical to the case when M=2.

European Journal of Political Economy, 2010

The Nash Demand Game (NDG) has been widely employed to model the emergence of moral norms such as property rights. We criticize this use because it neglects the important role played by incentives. Since in a NDG players are assumed to divide a windfall, there is no way to model the idea that expectations concerning the way in which the pie will be divided will influence the size of the pie itself. As a remedy, we propose to replace the NDG with an alternative game we dub Produce and Divide the Dollar (PAD). It is a simple Nash Demand Game, in which the pie to be divided is the result of an investment made by one of the two agents. In Andreozzi (2007) the evolutionary version of this game in which agents are allowed to have heterogeneous preferences is analyzed. Here we use these results to claim that the PAD offers a better paradigm for the evolutionary approach to moral norms than the simpler NDG.

Journal of Public Economics, 2007

We investigate how vertical unity within a community interacts with horizontal class divisions of an unequal income distribution. Community is conceptualized in terms of a public good to which all those in the community have equal access, but from which outsiders are excluded. We formulate the idea of redistributive tension, or class antagonism, in terms of the costs that poorer individuals would be willing to impose on the rich, to achieve a given gain in personal income. Our conclusion is that the nominal distribution of income could give a misleading picture of tensions in society, both within and across communities. Ideologies of community solidarity may well trump those of class solidarity because of the implicit sharing of community resources brought about by community-specific public goods. Greater economic mobility of particular types may actually exacerbate class tensions instead of attenuating them. We illustrate our theoretical results with a discussion of a number of historical episodes of shifting class tensions and alliances.

science, 2010

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