Theories of Fairness and Reciprocity

Most economic models are based on the self-interest hypothesis that assumes that all people are exclusively motivated by their material self-interest. In recent years experimental economists have gathered overwhelming evidence that systematically refutes the self-interest hypothesis and suggests that many people are strongly motivated by concerns for fairness and reciprocity. Moreover, several theoretical papers have been written showing that the observed phenomena can be explained in a rigorous and tractable manner. These theories in turn induced a new wave of experimental research offering additional exciting insights into the nature of preferences and into the relative performance of competing theories of fairness. The purpose of this paper is to review these recent developments, to point out open questions, and to suggest avenues for future research

Computational rationality and voluntary provision of public goods: an agent-based simulation model

The issue of the cooperation among private agents in realising collective goods has always raised problems concerning the basic nature of individual behaviour as well as the more traditional economic problems. The Computational Economics literature on public goods provision can be useful to study the possibility of cooperation under alternative sets of assumptions concerning the nature of individual rationality and the kind of interactions between individuals. In this work I will use an agent-based simulation model to study the evolution of cooperation among private agents taking part in a collective project: a high number of agents, characterised by computational rationality, defined as the capacity to calculate and evaluate their own immediate payoffs perfectly and without errors, interact to producing a public good. The results show that when the agents’ behaviour is not influenced either by expectations of others’ behaviour or by social and relational characteristics, they opt to contribute to the public good to an almost socially optimal extent, even where there is no big difference between the rates of return on the private and the public investment.Computational Economics; Agent-based models; Social Dilemmas; Collective Action; Public Goods

Why and How Identity Should Influence Utility

This paper provides an argument for the advantage of a preference for identity-consistent behaviour from an evolutionary point of view. Within a stylised model of social interaction, we show that the development of cooperative social norms is greatly facilitated if the agents of the society possess a preference for identity consistent behaviour. As cooperative norms have a positive impact on aggregate outcomes, we conclude that such preferences are evolutionarily advantageous. Furthermore, we discuss how such a preference can be integrated in the modelling of utility in order to account for the distinctive cooperative trait in human behaviour and show how this squares with the evidence

On Modeling Voluntary Contributions to Public Goods

This paper addresses four "stylized facts" that summarize data from experimental studies of voluntary contributions to provision of public goods. Theoretical propositions and testable hypotheses for voluntary contributions are derived from two models of social preferences, the inequity aversion model and the egocentric other-regarding preferences model. We find that the egocentric other-regarding preferences model with classical regularity properties can better account for the stylized facts than the inequity aversion model with non-classical properties.

The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories

This paper surveys recent experimental and field evidence on the impact of concerns for fairness, reciprocity and altruism on economic decision making. It also reviews some new theoretical attempts to model the observed behavior.Behavioural Economics; Other-regarding Preferences; Fairness; Reciprocity; Altruism; Experiments; Incentives; Contracts; Competition

The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories

Chapter written for the Handbook of Reciprocity, Gift-Giving and AltruismBehavioural Economics; Other-regarding Preferences; Fairness; Reciprocity; Altruism; Experiments; Incentives; Contracts; Competition

The Build-up of Cooperative Behavior among Non-cooperative Agents

We develop a theoretical model in which each individual is, in some ultimate sense, motivated by purely egoistic satisfaction derived from the goods accruing to him, but there is an implicit social contract such that each performs duties for the others in a way that enhances the satisfaction of all. We introduce a state variable that acts as a proxy for social capital of trustworthiness and that we call the stock of cooperation. We show that noncooperative agents might condition their action on this state variable. Agents build-up the society's stock of cooperation and gradually overcome the free riding problem in a game of private contribution to a public good. We assume that there are neither penalties in the sense of trigger strategies, nor guilt and that each individual is rational. Nous développons un modèle théorique dans lequel les individus sont motivés par la satisfaction égoïste que leur procure l’accumulation de biens, mais où le contrat social incite chaque individu à travailler pour les autres afin d’accroître le bien-être collectif. Nous introduisons une variable d’état représentant le stock de capital social, ou « stock de coopération ». Nous démontrons que cette variable peut influencer les actions des agents non-coopératifs. Les agents accumulent le stock de coopération de la société et réussisent à règler de manière progressive le problème du passager clandestin pour un jeu de contributions privées dans un bien public. Nous supposons qu’il n’existe pas de stratégies de pénalité, de sentiment de culpabilité chez les individus et que chaque agent est rationnel.behavior rule, public goods, stock of cooperation, trust, biens public, confiance, règle de conduite, stock de coopération