Reciprocity, Materialism and Welfare: An Evolutionary Model

Abstract

This paper analyses preference evolution in a bargaining situation. We show that preferences for reciprocity, that sustain a conflict-free outcome, are viable if players have enough information about opponents’ preferences. However, depending on the initial starting point, preference evolution can in general both enhance or reduce subjective and material welfare, relative to the situation where all players have the usual materialistic preferences.Preference evolution; Reciprocity; Altruism; Materialism; Subjective and material eciency; Bargaining; Indirect evolutionary approach