Swift Neighbors and Persistent Strangers: A Cross‐Cultural Investigation of Trust and Reciprocity in Social Exchange

In four countries, levels of trust and reciprocity in direct-reciprocal exchange are compared with those in network-generalized exchanges among experimentally manipulated groups’ members (neighbors) or random experimental participants (strangers). Results show that cooperation decreases as social distance increases; and, that identical network-generalized exchanges generate different amounts of trusting behavior due solely to manipulated social identity between the actors. This study demonstrates the interaction of culture and social identity on the propensity to trust and reciprocate and also reveals differing relationships between trust and reciprocation in each of the four countries, bringing into question the theoretical relationship between these cooperative behaviors

Social Preferences and the Efficiency of Bilateral Exchange

Under what conditions do social preferences, such as altruism or a concern for fair outcomes, generate efficient trade? I analyze theoretically a simple bilateral exchange game: Each player sequentially takes an action that reduces his own material payoff but increases the other player’s. Each player’s preferences may depend on both his/her own material payoff and the other player’s. I identify necessary conditions and sufficient conditions on the players’ preferences for the outcome of their interaction to be Pareto efficient. The results have implications for interpreting the rotten kid theorem, gift exchange in the laboratory, and gift exchange in the field

On Getting People To Cooperate When Facing A Social Dilema: Moralizing Helps

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A Case for Humans-in-the-Loop: Decisions in the Presence of Erroneous Algorithmic Scores

The increased use of algorithmic predictions in sensitive domains has been accompanied by both enthusiasm and concern. To understand the opportunities and risks of these technologies, it is key to study how experts alter their decisions when using such tools. In this paper, we study the adoption of an algorithmic tool used to assist child maltreatment hotline screening decisions. We focus on the question: Are humans capable of identifying cases in which the machine is wrong, and of overriding those recommendations? We first show that humans do alter their behavior when the tool is deployed. Then, we show that humans are less likely to adhere to the machine's recommendation when the score displayed is an incorrect estimate of risk, even when overriding the recommendation requires supervisory approval. These results highlight the risks of full automation and the importance of designing decision pipelines that provide humans with autonomy.Comment: Accepted at ACM Conference on Human Factors in Computing Systems (ACM CHI), 202

The Economic Ethics of Social Dilemmas

Economic ethics is a research program that employs instruments of economic analysis in order to reflect upon problems of morality, e.g. the legitimization of market and state in shaping individual conduct. From the perspective of economic ethics, this paper examines the concept of social dilemmas and its significance for understanding – and improving – the institutional structures of modern society. A social dilemma is a situation, in which all actors behave according to their individual interests but the outcome is Pareto-inferior. The archetype of a social dilemma is the prisoners' dilemma that has become famous as a centerpiece of game theory. However, while game theory looks at optimal strategies for individual players in the interaction with others, economic ethics analyzes the institutional conditions of the interaction from a social perspective. It employs the concept of social dilemmas as a heuristics to identify changes in the rules of the game that improve the overall outcome. In light of this approach, economic ethics is concerned with transforming the outcome of strategy combinations rather than trying to modify individual strategies. This can either imply establishing a social dilemma or overcoming it, depending on the effect of cooperation on a third party. This approach involves changing the payoffs for actors by introducing rewards or penalties through either external authority or through actors' selfcommitment. The optimal choice of method depends on the type of situation, the existence of an effective authority and the available incentives. Thus, understanding the economic logic of social dilemmas is vital for assessing the legitimacy of institutional arrangements