prisoners dilemma

Governing The Commons: The Evolution of Institutions for Collective Action

One Sentence Summary:
Any group that attempts to manage a common resource (e.g., aquifers, judicial systems, pastures) for optimal sustainable production must solve a set of problems in order to create institutions for collective action; there is some evidence that following a small set of design principles in creating these institutions can overcome these problems.
Disciplines:
Law
History
Economics
Political Science
Sociology
Findings:
  • People are trapped by the Prisoner's Dilemma only if they treat themselves as prisoners by passively accepting the suboptimum strategy the dilemma locks them into, but if they try to work out a contract with the other players, or find the ones most likely to cooperate, or agree on rules for punishing cheaters, or artificially change the incentive ratios - they can create an institution for collective action that benefits them all. This resonates with Peter Kollock's taxonomy of strategies for dealing with social dilemmas - one strategy is to change the rules of the game.
  • Changing the rules of the game to turn zero-sum games into non-zero-sum games may be one way to describe the arc of civilization for the past 8000 years: using symbolic media and social inventions, people have created institutions for collective action since the emergence of agriculture spurred the invention of writing. But for the most part, we've overcome obstacles and built these institutions blindly, without any systematic knowledge about how the game works. Ostrom takes an empirical approach: By examining legal records and other public documents, is it possible to determine whether every population overconsumes and under-provisions all common pool resource? She found that in many different cultures all over the world, some groups would find ways to overcome the obstacles that defeated others - by creating contracts, agreements, incentives, constitutions, signals, media to enable cooperation for mutual benefit.
  • Social dilemmas of multiple dimensions are obstacles on the path to creating institutions for collective action; these dilemmas must be overcome if institutions are to succeed or exist at all. Lack of information about the system can be an obstacle to agreement among the individuals who make up the system.Systemic information about salinization of wells was an obstacle to water-sharing agreements in California; individual water-users knew whether their wells were pumping salt, but none of them had compiled the information to see the overall pattern in the watershed, and no individual was willing to pay the price of gathering it. In this case, the US Geographic Survey had the data, thus overcoming this obstacle. Another obstacle, free-riding, creates the second order social dilemma concerning who will bear the cost of policing the rules once they are agreed upon. So although the overall formula is simple - social dilemmas can be solved through institutions for collective action that are built by overcoming known obstacles - in practice, each group that struggles to build an institution works under the handicap of being largely unaware of knowledge about how such institutions succeed and fail.
  • In comparing the communities, Ostrom found that groups that are able to organize and govern their behavior successfully are marked by the some basic design principles:
    • Group boundaries are clearly defined.
    • Rules governing the use of collective goods are well matched to local needs and conditions.
    • Most individuals affected by these rules can participate in modifying the rules.
    • The rights of community members to devise their own rules is respected by external authorities.
    • A system for monitoring member's behavior exists; the community members themselves undertake this monitoring.
    • A graduated system of sanctions is used.
    • Community members have access to low-cost conflict resolution mechanisms.
    • For CPRs that are parts of larger systems: appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.
Keywords:
public goods
prisoners dilemma
norms
cooperation
Author(s) / Editor(s):
Published in:
Cambridge University Press
Date:
1990
One Paragraph Summary:

Civilizations are institutions built on institutions built on institutions for collective action: empires and democracies, science and capitalism are the result of the evolution of institutions for collective action. Until recently, people who have learned to managed common resources have focused on the immediate problems of irrigation or grazing, not on the abstract dynamics of making agreements about solving those problems. One of the key findings of sociologists about successful management of common pool resource systems is that foremost among the necessities for success are good communication among the appropriators of resources and the widespread circulation of accurate knowledge about institutional frameworks, individual compliance behavior (reputation), and the ongoing state of the resource. Groups that learn to solve complex nested collective action dilemmas can harness more resources and create a larger pool of wealth, spread more widely, than groups that fail - in fact, in examples like the aggregation of knowledge through public science, the resource grows best when spread widely. Understanding the underlying design principles for successful collective action institutions can make the difference between success and failure in practice in a very wide range of environments, from forestry to urban transportation systems.

One Page Summary:

Definitions

The commons is a general term for shared resources in which each stakeholder has an equal interest. Studies on the commons include the information commons with issues about public knowledge, the public domain, open science, and the free exchange of ideas -- all issues at the core of a direct democracy.

Common-pool resources (CPRs) are natural or human-made resources where one person's use subtracts from another's use and where it is often necessary, but difficult and costly, to exclude other users outside the group from using the resource.. The majority of the CPR research to date has been in the areas of fisheries, forests, grazing systems, wildlife, water resources, irrigation systems, agriculture, land tenure and use, social organization, theory (social dilemmas, game theory, experimental economics, etc.), and global commons (climate change, air pollution, transboundary disputes, etc.), but CPR's can also include the broadcast spectrum.

Issues

Whenever a group of people depend on a resource that everybody uses but nobody owns, and where one person's use effects another person's ability to use the resource, either the population fails to provide the resource, overconsumes and/or fails to replenish it, or they construct an institution for undertaking and managing collective action. The common pool resource (CPR) can be a fishery, a grazing ground, the Internet, the electromagnetic spectrum, a park, the air, scientific knowledge. The institution can be a body of informal norms that are disseminated by word of mouth, enforced by gossip or religious stricture, and passed from one generation to another, or a body of formal written laws that are enforced by state agencies, or a marketplace that treats the resource as private property, or a mixture of these forms. In the real world of fishing grounds and wireless competition, CPR institutions that succeed are those that survive, and those that fail sometimes cause the resource to disappear (e.g., salmon in the Pacific Northwest).

Elinor Ostrom's founding role in the evolution of an interdiscipline of cooperation studies grew from her challenge to currently accepted wisdom about institutions for collective action, her careful inductive examination of empirical studies of common pool resource management, and her insistence on interdisciplinary analysis. The dynamics she uncovered in her research - seven principles common to most successful, enduring common pool resource arrangements - are the starting point for anyone who wants to know how careful theoretical and experimental work can provide practical guidance for policy.

"The word commons originally denoted pastureland treated as a common resource, where individual herders were free to graze their sheep or cattle. The land can support a limited number of grazing animals. The temptation to graze more than one's share is a rational strategy for an individual herder. But if all succumb to the same temptation, the grass ceases to grow and the value of the pasture to everybody disappears."

In a 1986 lecture, Elinor Ostrom challenged the inexorable inevitability of Hardin's tragedy, noting that the situation described in Garrett Hardin's classic 1968 paper "The Tragedy of the Commons" has "the same underlying structure as the decision facing each prisoner in the so-called Prisoner's dilemma game." She also wrote:

"The Prisoner's Dilemma game has fascinated scholars in many fields. The paradox that individually rational strategies lead to collectively irrational outcomes seems to challenge a fundamental faith that rational human beings can achieve rational results. In the introduction to a recently published book, Paradoxes of Rationality and Cooperation, Richmond Campbell explains the "deep attraction" of the dilemma".

In her 1986 lecture, Ostrom emphasized the connection between the tragedy of the commons and the Prisoner's Dilemma game, but had the scientific curiosity to inquire whether tragically locked-in Prisoner's Dilemma strategies actually constrained human choice in all cases where humans have documented their use of common pool resources - she shrewdly understand that the cases in which people overcame the barriers to collective action are as important as the cases in which they fail:

"Scholars and government officials presume that all participants in situations with the structure of a PD game are necessarily trapped in the structure of the situation; as prisoners are trapped in their cells, participants are themselves trapped in their own mental apparatus. I shall argue that the structure is conceptually and methodologically necessary for analysis, but not an empirical necessity. The inability of participants to change the structure may be an empirical reality in some situations. It is not an empirical reality in many situations, however."

Ostrom argued from well-documented cases of informal institutions that had evolved into formal if localized arrangements, sometimes lasting for centuries, that groups could evolve effective institutions without externally coercive authority - if they could solve the "common set of problems." The design principles that Ostrom extracted from cases of successful CPR management turned out to be missing from most of the cases of failed CPR management she investigated - evidence that these design principles are clues to solutions to the problems preventing collective action in many instances. Ostrom argued forcefully that neither direct intervention by the state nor total privatization are necessary for people to evolve successful institutions - although state-provided courts lower the costs of creating the institutions, and the market value of well-managed CPRs provides strong incentive to create, agree, and maintain such arrangements.

Conclusions

Ostrom claims that "all efforts to organize collective action, whether by an external ruler, an entrepreneur, or a set of principals who wish to gain collective benefits, must address a common set of problems." These problems are "coping with free-riding, solving commitment problems, arranging for the supply of new institutions, and monitoring individual compliance with sets of rules." Ostrom found that groups that are able to organize and govern their behavior successfully are marked by the following design principles:

  1. Group boundaries are clearly defined.
  2. Rules governing the use of collective goods are well matched to local needs and conditions.
  3. Most individuals affected by these rules can participate in modifying the rules.
  4. The rights of community members to devise their own rules is respected by external authorities.
  5. A system for monitoring member's behavior exists; the community members themselves undertake this monitoring.
  6. A graduated system of sanctions is used.
  7. Community members have access to low-cost conflict resolution mechanisms.
  8. For CPRs that are parts of larger systems: appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.

Foundations of Human Sociality (Introduction and Overview)

One Sentence Summary:
Experiments like the Ultimatum Game and the Public Goods Game (one shot games for real money divided among strangers) that have been conducted in different countries all over the world have shown that group behavior frequently does not fit the traditional model of self-interested actors, that it is too richly varied between cultures to support a universal sense of fairness, and that a higher degree of market integration and higher payoffs to cooperation can be linked to greater levels of prosocial behavior.
Disciplines:
Economics
Sociology
Psychology
Findings:
  • People are willing to reward fairness and reciprocity and punish those who do not act pro-socially, even at cost to themselves.
  • Group-level differences in behavior proved to be greater than individual-level differences, indicating cooperative behavior might be more embedded in cultural conditions than was previously thought. While one culture might take advantage of a person who is too altruistic, another might exclude a person for being too self-interested.
Keywords:
trust
reputation
reciprocity
public goods
prisoners dilemma
game theory
equilibrium
cultural evolution
cooperation
communication
assurance game
altruism
Published in:
Oxford University Press
Date:
2004
One Paragraph Summary:

The self-regarding and outcome oriented picture of human behavior presented in traditional economics does not explain why humans care so much about each other and about how social interaction is carried out, not just the end goals. The Ultimatum Game, designed by Werner Guth, is just one illustration of how real people will not always follow the dictates of self-interested rationality. Two subjects are given a sum of money, one is given the power to divide the sum, and the other can either accept or reject (in which case neither get any money). Research from conducting hundreds of trials of the game with thousands of students in Europe, Japan and the USA has shown that the responders frequently reject low offers and proposers frequently propose near equal divisions, even though it is to their monetary disadvantage. While early experiments on undergraduates seemed to suggest that there was a universal sense of fairness, extended research in different cultures (hunter-gatherers, slash-and-burn agriculturists, nomadic pastoralists) has exposed much cultural variation in responses, indicating that local cultural conditions play an important role in how people approach cooperation.

One Page Summary:

The self-regarding and outcome oriented picture of human behavior presented in traditional economics does not explain why humans care so much about each other and about how social interaction is carried out, not just the end goals. The Ultimatum Game, designed by Werner Guth, is just one illustration of how real people will not always follow the dictates of self-interested rationality. Two subjects are given a sum of money, one is given the power to divide the sum, and the other can either accept or reject (in which case neither get any money). Research from conducting hundreds of trials of the game with thousands of students in Europe, Japan and the USA has shown that the responders frequently reject low offers and proposers frequently propose near equal divisions, even though it is to their monetary disadvantage. While early experiments on undergraduates seemed to suggest that there was a universal sense of fairness, extended research in different cultures (hunter-gatherers, slash-and-burn agriculturists, nomadic pastoralists) has exposed much cultural variation in responses, indicating that local cultural conditions play an important role in how people approach cooperation.

While mean proposals for university students from all over the world was usually between 42 and 48 percent, mean proposals from this cross-cultural study varied from 25 to 57 percent. Rejection rates, the action of the responders, also varied considerable between groups. Individual-level economic and demographic variables did not explain behavior as well as group-level behavior, and game play often could be connected to the people's common patterns of interaction. For example, the Orma recognized that one of the experiment's games was similar to the harambee, a local institution of giving to public goods like roads and schools. They began calling it 'the harambee game' and displayed highly prosocial behavior. In other groups, like the Au and Gnau, frequent rejection of generous offers can be explained by a cultural association with gift-giving: accumulating gifts, even if unsolicited, can imply a lowered status and force the receiver into future obligations or political alliance. The cross-cultural study showed that, in the case of groups at the extremes of behavior, "contrasting behaviors seem to reflect their differing patterns of everyday life, not any underlying logic of hunter-gatherer life ways."

The effect of market integration on cooperation to obtain a monetary reward can be explained easily: individuals from market-oriented societies when put in the context of one of the games are able to seek analogues in their daily activities of using and trading money with strangers. "Those who do not customarily deal with strangers in mutually advantageous ways may be more likely to treat anonymous interactions as hostile or threatening, or as occasions for the opportunistic pursuit of self-interest."

Evolution of Indirect Reciprocity

One Sentence Summary:
Cooperation through indirect reciprocity, captured by the phrase "I help you, someone else helps me", requires the evolution of reputations and communication of those reputations among the larger group (as in the human instinct to gossip), cognitive abilities beyond being able to identify relatives (required for kin selection) or the individuals who have cooperated with you in the past (required for direct reciprocity).
Disciplines:
Economics
Sociology
Psychology
Findings:
  • "The hypothesis that more information leads to more cooperation has been confirmed in experiments, which compare three information conditions. In one condition, players have no information about their co-players; in the second they are told about what their co-players have decided when last in the role of a donor; and in the third they also know about the score of the recipient of the co-player. We note that this is not always enough to decide whether a previous defection was justified or not. However, the additional knowledge did enhance cooperation."
  • "Indirect reciprocity is situated somewhere between direct reciprocity and public goods. On the one hand it is a game between two players only, the donor and the recipient, but on the other hand it has to be played within a larger group. Richard Alexander claimed that indirect reciprocity originates from direct reciprocity in the presence of interested audiences."
  • "It is easy to conceive that an organism experiences as 'good' or 'bad' anything that affects the organism's own reproductive fitness in a positive or negative sense. The step from there to judging, as 'good' or 'bad', actions between third parties, is not obvious. The same terms 'good' and 'bad' that are applied to pleasure and pain are also used for moral judgements: this linguistic quirk reveals an astonishing degree of empathy, and reflects highly developed faculties for cognition and abstraction."
  • Even a group of players with discriminating strategies can be sidetracked by imperfect transfer of reputation information, as in unfounded rumors or exaggeration: "if players have different views about the reputation of others, then errors in perception can undermine cooperation."
  • In empirical studies, discriminating players are sensitive to their own score: "players who justifiably refuse to donate to a defector show an increased tendency to provide donations in the following round, as if to make up for that refusal. This indicates that they expect their refusal to lower their score in the co-players' eyes and that they do not rely on the community's understanding."
Keywords:
agent-based model
altruism
assurance game
communication
cooperation
equilibrium
game theory
language
norms
prisoners dilemma
public goods
punishment
reciprocity
reputation
tit-for-tat
trust
Author(s) / Editor(s):
Published in:
Nature 437, 1291-1298
Date:
October 27, 2005
One Paragraph Summary:

Cooperation through indirect reciprocity, can be captured by the phrase "I help you, someone else helps me". Indirect reciprocity helps explain how cooperation is possible at all when economic transactions move beyond small villages where one can easily keep track of one's interactions with everyone else. The success of strategies of indirect reciprocity in empirical studies might be attributable to the fact that humans care so deeply not only about how they are treated, but about the results of interactions between third parties. This concern and the desire to communicate concerns, or gossip, might in turn be explained by evolutionary psychology and the benefits of cooperation in large groups, surpluses resulting from division of labor. To test strategies of indirect reciprocity no two players can interact more than once and the scores of players (the portion of times they have cooperated with others) must be visible. A player choosing a simple version of indirect reciprocity will only cooperate with those whose score is above a certain threshold. However, this player might be punishing another player using indirect reciprocity who has only interacted with defectors. "Effectively, discriminating players pay a cost for punishing bad co-players. Such a form of altruistic punishment can promote cooperation in the community, but at a cost to the punisher, and thus can be viewed as a social dilemma." A more sophisticated strategy would have a player discriminate between justified defection (defecting to punish someone who always defects) and unjustified defection (defecting regardless of the recipients reputation). This strategy avoids the case where a group of players who always cooperate is invaded by a group of players who always defect, but it requires the cognitive abilities to keep track of interactions that are far removed from one's own.

Drama of the Commons (Introduction)

One Sentence Summary:
Institutional arrangements embedded in a complex social context of rules and norms such as trust can overcome the deterioration and depletion of common-pool resources arising from individuals' rational self-interest; specific arrangements tailored to the inherent characteristics of a common-pool resource and the users can provide the optimal sustainable management of that resource.
Disciplines:
Anthropology
Economics
Political Science
Sociology
Findings:
  • Agrawal and Kopelman, Weber and Messick, in summarizing the research on design principles and psychological factors respectively, both maintain that various commons dilemmas each have a different set of most applicable factors. To successfully study or generate collective action in the instance, one must identify out of the large group of variables presented in the research literature the ones that are most relevant.
  • Technological and economic evolution has accelerated throughout the past centuries; we must equip our institutions for governing the commons with mechanisms for adapting to rapid, often unpredictable changes in the biophysical and social environment.
  • While local-level common property institutions do not guarantee sustainable use of resources, local groups do not have the incentive of mass exploitation of resources that politically powerful multinational corporations have. A broad look at the commons research suggests that positive, responsive interplay between national or sub-national regimes and local institutions cannot be missing from the equation.
Keywords:
cooperation
prisoners dilemma
property rights
public goods
Published in:
National Academy Press
Date:
2002
One Paragraph Summary:

Hardin's 1968 article, "The Tragedy of the Commons," drew attention to the problem of coordinating sustainable use of common-pool resources (e.g., grazing pastures, fisheries, watersheds, etc). Rebuttals to his article argued that successful management of shared resources where humans value the interests of the whole group can and does emerge, for example in village communities. In the successful cases, the designation of a resource as common property does not entail a simple open-access regime, but instead complex arrangements of usage rights and maintenance duties legitimated through local customs and individual interactions. Social scientists studying common-pool resource management insist on the importance of the initial and local conditions in determining the emergence and sustained vitality of institutional arrangements. Rules must be appropriate to the local conditions, enforced consistently, understood and considered legitimate by the members of the group, and be subject to change by the people they are imposed on. Common-pool resources are always subject to the free-riding problems of overuse and underprovision (people who benefit from the resource but do not help pay for it). Researchers also associate a set of second tier obstacle to creating arrangements for use of these resources, including free-riders who benefit from but don't contribute to setting up the rules governing the institution, participation in monitoring and punishing those who break the rules. The optimal arrangement will depend on, among other factors, subtractibility, whether one user's consumption of the resource diminishes the possibility of use for others.

Common Resources and Institutional Sustainability

One Sentence Summary:
While existing studies on institutions for common-pool resource management have generated a relatively large number of universal design principles common to successful institutions, these principles apply to the institutions themselves; future research should include contextual factors of the resource, user group and external environment and focus on specific causal configurations of a more narrow range of interacting variables.
Disciplines:
Anthropology
Economics
Political Science
Sociology
Findings:
  • User-friendly institutional characteristics can be crucial to maintaining a commons, including choices that "encourage fairness in the allocation of benefits from the commons; grant autonomy to users for crafting, implementing, and enforcing institutional arrangements that they identify as being critical in managing resources; institutionalize low-cost mechanisms for adjudication of disputes; promote accountability of office holders to users; and create local-level incentives to develop substitutes."
  • The relation between group size and collective action is not as simple as often described. The impact of group size is affected by many other variables, including "productive technology of the collective good, its degree of excludability, jointness of supply, and the level of heterogeneity in the group."
  • Certain causal configurations of variables surrounding a commons might contradict the universal principles arrived at by sampling hundreds of long-standing institutions. For instance, unpredictability in the flow of benefits from a resource or group mobility might require the boundaries on the resource and group membership to be blurred enough to accommodate fluctuations.
  • The time is ripe for better design principles for institutions for collective action: "national governments in nearly all developing countries have turned to local-level common property institutions in the past decade as a new policy thrust to decentralize the governance of the environment."
Keywords:
capitalism
prisoners dilemma
privatization
property rights
public goods
Author(s) / Editor(s):
Published in:
National Academy Press
Date:
2002
One Paragraph Summary:

Empirical research has demonstrated that the "tragedy of the commons" is not inevitable when a group of people share a resource that can be depleted from overuse or underprovision. Ostrom's foundational research inductively uncovered design principles that tend to be present when institutions for collective action succeed in maintaining such resources. Recent research on institutional arrangements of common-pool resources has shown that there are more sustainable possibilities than just private property or state-owned arrangements. In drawing up facilitating conditions for commonly managed resources, however, researchers have not done more than select a list of universal characteristics from hundreds of successful cases. Research in this area should be redesigned to reach more predictive and explanatory conclusions about sustainable institutions. "Instead of focusing on lists of factors that apply to all commons institutions, it is likely more fruitful to focus on configurations of conditions that contribute to sustainability." Purposive sampling (sampling on the basis of a few relevant variables) and including the cases of failed common-pool management are more appropriate for testing theories of causal relationships and will expand the predictive power of conclusions beyond cases similar to the sample set. Studies of common property regimes would also be bolstered with more explicit consideration of contextual variables, including the type of resource, characteristics of the user group, and the wider social, physical and institutional environment, rather than just properties of the institution itself.

One Page Summary:

Social theorists of the late nineteenth century, such as Comte, Durkheim, Marx, Spencer, Tonnies and Weber, along with anthropologists of indigenous peoples have argued that with industrialization, modern societies will inevitably experience a decline in the norms that protect communal life. Throughout the twentieth century, in place of these norms, markets, states, and contractual obligations emerged as the appropriate means of dealing with common property. Nevertheless, recent scholarship on common property has shown that users are successful in distributing benefits "equitably, over long time periods, and with only limited efficiency losses." Three papers on the commons, by Wade (1994), Ostrom (1990), and Baland and Platteau (1996), have sought out facilitating conditions for sustainable common-property institutions, albeit through different empirical methods. Their overlapping principles are a good starting place for crafting successful institutions for collective action, but their work can also be used as a stepping ladder to more rigorous studies and predictive conclusions.

Wade argues that environmental risks help push people toward interdependence and defending their crucial commons. He also points to limited numbers of users who are not scattered over a large area, proximity between users and resource, clear boundaries of the user group and resource, easy detection of rule-breakers, graduated sanctions, low-cost exclusion technologies and recognition of local authority by central government as other facilitating conditions. These conditions are duplicated in much of the other literature on commons.

Ostrom lists eight design principles and qualifies sustainability on the legitimate acceptance of rules and obligations of the institution by subsequent generations of users. For her interests in long-term sustainability, Ostrom looks to successful long-standing institutions for her guiding principles, rather than starting with theoretical, causally-linked variables and then picking her sample. She cites as important principles, along with Wade, clear boundaries on user group and resource, homogeneity among users, locally-devised rules that are easy to implement, graduated sanctions and recognition from the central government.

Baland and Platteau confirm that regulated common property systems can be just as efficient as private property systems. They list principles that overlap with those mentioned above, also including past experiences of cooperation, external aid and strong leadership. They do not delve into how different factors might interact with each other, but instead list them as facilitating conditions in general.

Missing from the three articles is extensive attention to resource characteristics. For example, climatic information would be a significant factor in possibility of regeneration of an agricultural resource and the migratory patterns of a herd would be serious limiting factor for its local management. Small group size might not be a facilitating condition in certain situations, considering the "mobility of the resource, and volatility and unpredictability in the flow of benefits from a resource." Contextual factors like demographic conditions or local market demands, while not emphasized in any of the three articles, can be crucial factors in the viability of a commonly managed resource.

An Evolutionary Approach to Norms

One Sentence Summary:
Exploration of games in which punishment is possible and cheating is not automatically detected reveals that norms can emerge and stabilize only if those who fail to punish violators are also punished.
Disciplines:
Biology
Computer Science
Economics
Political Science
Findings:
  • Norms can emerge in competitive situations when players can observe each other and imitate the strategies of successful players.
  • N-person Prisoner's Dilemma games can't be resolved with simple reciprocity without enabling cooperators to also punish defectors.
  • Norms can emerge and grow stable if metanorms establish a willingness to not only punish violators but also those who fail to punish violators.
  • Norms likely emerge from behaviors that signal others to reward individuals (reputation), and spread through both imitation as well as punishment of violators.
  • "There may be some useful cooperative norms that could be hurried along with relatively modest interventions."
Keywords:
reputation
cooperation
evolution
norms
game theory
agent-based model
cultural evolution
complexity
competition
prisoners dilemma
altruism
Author(s) / Editor(s):
Published in:
American Political Science Review 80, No. 41095-1111
Date:
1997
One Paragraph Summary:

The decrease in punishment of those who failed to punish violators may have played a part in the sudden collapse of communism, and Granovetter noted that riots can have tipping points in which "a slight change in the willingness of a few people to act first can get the ball rolling." Axelrod defines norms thus: "A norm exists in a given social setting to the extent that individuals usually act in a certain way and are often punished when seen not to be acting in this way." Therefore, norms are a matter of degree, not all or nothing. "By linking vengefulness against nonpunishers with vengefulness against defectors, the metanorm provides a mechanism by which the norm against defection becomes self-policing." Reputation plays a role because defection is not only a means for a defector to harvest a payoff, but a signal that can be used be others: "a norm is likely to originate in a type of behavior that signals things about individuals that will lead others to reward them." The observation from norms-game trials that norms can sometimes establish themselves quickly led Axelrod to conclude that "there may be some useful cooperative norms that could be hurried along with relatively modest interventions."

Measuring Social Norms and Preferences Using Experimental Games: A Guide for Social Scientists

One Sentence Summary:
In addition to self-interested behavior, various experimental games have been able to quantifiably demonstrate behavior with preferences for altruism, equality and reciprocity, reflections of a human dedication to social norms even at personal cost.
Disciplines:
Economics
Sociology
Psychology
Findings:
  • One benefit of game experiments is that they are relatively comparative across subject pools and cultures (at least as comparative as most qualitative experiments) and easily replicable.
  • Experimental evidence supports theories of "altruistic punishment," in which the visibility of punishment for free-riders increases the level of cooperation in a population.
  • Future social preferences theories should attempt to explain pro-social behavior with one model across multiple games and make predictions that can be tested and falsified.
  • Evolution equips people with the cognitive ability to learn social norms and resulting strategies rather than having them hard-wired into the brain. This enables humans to create institutions for generating public goods, even at the expense of individual contributors.
Keywords:
punishment
public goods
prisoners dilemma
game theory
equilibrium
assurance game
altruism
reciprocity
reputation
trust
Author(s) / Editor(s):
Published in:
Oxford University Press
Date:
2004
One Paragraph Summary:

The seven games explored here, ultimatum, public goods, dictator, prisoner's dilemma, trust, gift-exchange, and third party punishment, can be used both as metaphor to describe prototypical situations in the social world and as a tool to predict the behavior of players in the context of other players' likely actions. Data on the responses of real players can help guide the formation of successful and sustainable institutions for collective action. In a public goods game, for instance, contributions to the public good declined over repeated periods as cooperative players eventually became frustrated with an instigating group of free-riders. Once the structure of the game is altered to allow for punishment of free riders, the average contribution rises steeply to over 95 percent of the endowment. The actual rate of punishment does not have to be that high to generate this increase either; "the mere threat of punishment, and the memory of its sting from past punishments, is enough to induce potential free riders to cooperate."

One Page Summary:

The seven games explored here, ultimatum, public goods, dictator, prisoner's dilemma, trust, gift-exchange, and third party punishment, can be used both as metaphor to describe prototypical situations in the social world and as a tool to predict the behavior of players in the context of other players' likely actions. Data on the responses of real players can help guide the formation of successful and sustainable institutions for collective action. In a public goods game, for instance, contributions to the public good declined over repeated periods as cooperative players eventually became frustrated with an instigating group of free-riders. Once the structure of the game is altered to allow for punishment of free riders, the average contribution rises steeply to over 95 percent of the endowment. The actual rate of punishment does not have to be that high to generate this increase either; "the mere threat of punishment, and the memory of its sting from past punishments, is enough to induce potential free riders to cooperate."

Another alteration that increases cooperation is permitting communication. "Communication allows the conditional cooperators to coordinate on the cooperative outcome and it may also create a sense of group identity." In the trust game, an investor gives an amount to a trustee, which is tripled and the trustee can give any amount from all to nothing back to the investor. Positive reciprocity, a sense of obligation to repay trusting investors that arises in the trust game, is an important key to harnessing cooperation. Implicit social contracts built on the basis of positive reciprocity are cheaper to implement and can be more successful than explicit contracts.

The environment of our evolutionary adaptation can theoretically explain the origin of these preferences in repeated game settings. Evolution equips people with the cognitive ability to learn social norms and resulting strategies rather than having them hard-wired into the brain. This accords with the game theory conclusion that the best strategy depends on the structure of social relations and potential for norms to take hold and be effective.

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