Neither private contract or governmental fiat singly or in combination provides an adequate basis for the governance of modern societies.#
Groups in which shame is common can sustain high levels of group cooperation at limited cost and will be more likely to survive environmental, military and other challenges, and thus to populate new sites vacated by groups that failed. As a result, selective pressures at the group level will also favor religious practices and systems of socialization that support susceptibility to shame for failure to contribute to projects of mutual benefit of the type modeled in the previous two sections.#
An organism with complete information, an unlimited capacity to process information, and with a fitness-maximizing way of discounting future costs and benefits would have no use for pain.#
Social emotions are often altruistic, indicating actions benefiting others at a cost to oneself, so that in any dynamic in which the higher payoff trait tends to increase in frequency, social emotions would eventually disappear.#
Taking on a general rule of behavior as an objective rather than a constraint or an instrument toward some other end is likely to be costly for two reasons. First, a considerable fraction of the total available time of the members of most societies is spent teaching the young the proper way to behave, rather than providing for the nutritional and other needs of its members. But in addition to the cost of acquiring such a norm, there is a further cost: the rule will not be ideally suited to all situations, and its internalization deprives the individual of flexibility in dealing with such situations on a case-by-case basis.#
Once an internalization allele has evolved to fixation, there is nothing to prevent group-harmful phenotypic norms from also emerging, provided they are not excessively costly to the individual, given the strength of the payoff-based updating process.#
A norm of truth-telling developed pari passu with the punishment of free-riders. . . . We do not believe effective collective punishment could have evolved in the absence of a system of information-sharing in which truth-telling was rewarded and lying punished.#
Consistent with the “strength in numbers” and “divide and rule” maxims, punishment is characterized by increasing returns to scale, so the total cost of punishing a particular target declines as the number of punishers increases.#
Together, a predisposition to cooperate and a willingness to punish defectors is what we have termed strong reciprocity, and it is the combination of the two that is essential to the large-scale cooperation exhibited by our species.#
Where an altruistic trait has evolved because most fitness-relevant interactions take place within genetically differentiated groups rather than between family members within groups, we say that multi-level selection rather than kin-based selection is the explanation.#
Because altruists receive lower payoffs than other group members, they benefit from reproductive leveling because this attenuates the within-group selective pressures working against them.#
While isolated groups surely existed, most humans had frequent contact with a substantial number of individuals beyond the immediate family. . . . Social order in prestate small-scale societies was sustained in important measure by a process of coordinated peer pressures and punishment.#
Cooperation often unravels when the withdrawal of cooperation by the civic-minded intending to punish a defector is mistaken by others as itself a violation of a cooperative norm, inviting a spiral of further defections. In virtually all surviving societies with substantial populations, this problem is addressed by the creation of a corps of specialists entrusted with carrying out the more severe of society’s punishments. Their uniforms convey the civic purpose of the punishments they mete out, and their professional norms, it is hoped, ensure that the power to punish is not used for personal gain.#
The economic theory of cooperation based on repeated games proves the existence of equilibria with socially desirable properties, while leaving the question of how such equilibria are achieved as an afterthought.#
Even presupposing extraordinary cognitive capacities and levels of patience among the cooperating individuals, there is no reason to believe that a group of more than two individuals would ever discover the cooperative Nash equilibria that the [Folk Theorem] models have identified, and if it were to hit on one, its members would almost certainly abandon it in short order.#
The reason that individuals are content to interact through prices alone [in the Arrow-Debreu model], and hence have no incentive to engage in strategic personal interactions, is that all relevant aspects of exchanges are assumed to be covered by complete contracts, enforceable at no cost to the exchanging parties.#
A signaling equilibrium, however, does not require that the signal confer benefits on other group members. Antisocial behaviors could perform the same function: beating up one’s neighbor can demonstrate physical prowess just as convincingly as bravely defending one’s group. If signaling is to be an explanation of group-beneficial behavior, we must explain why group-beneficial signaling is favored over antisocial signaling. . . . Group competition provides a reason why the signaling that we observe tends to be group beneficial, while signaling theory provides a reason why signaling of any kind may be evolutionarily stable in a within-group dynamic.#
In the signaling model the third party responds favorably because the signal is correlated with some desirable but unobservable property of the actor; in the indirect reciprocity model the signal (cooperating with those in good standing) is the desirable property itself. In the case of indirect reciprocity, I want to associate with the hunter who shares his ample prey with other members of the group because I too would like a share of meat. In the signaling model I want to associate with him because the fact that he has lots of meat to share indicates that he is physically able and would be a good mate or coalition partner.#
Because the truth-telling that is necessary to convert private to public information cannot be expected in the absence of social preferences and because public information is essential to the empirical plausibility of both the simple reciprocal altruism model and its indirect reciprocity variant, [reputation] models do not provide adequate explanations of cooperation among amoral and self-regarding individuals.#
[A public goods] game supports cooperative outcomes only if the group is small, the returns to cooperation are high, the behavior of each group member is known with a high degree of accuracy by all of the other group members, errors in execution are infrequent, and group members are very patient and interactions typically endure for many periods. The reason for the ineffectiveness of reciprocal altruism for groups with several members is simple. In groups of two, a free-rider cannot go undetected because a player’s payoff reveals the other player’s behavior. Equally important, when one member defects in order to punish a Defector, the punishment is uniquely targeted on the Defector. But, in groups larger than two, a player cannot infer who has defected from the knowledge of his own payoff. Moreover, a retaliatory defection punishes not only the initial defector, but also all other members of the group. Moreover, other group members may not have observed the initial defection and hence may think that a retaliatory defection is a free-riding defection, inviting further retaliatory defections.#
The sharing of some food in foraging groups does not take the form of the redistribution of food that has been pooled on a groupwide basis, what we term common pot redistribution, but rather is network-based.#
There is little evidence of reciprocal altruism in non-human animals. . . . A major impediment is that reciprocal altruism requires that animals act as if future payoffs are not greatly discounted. But non-human animals are extraordinarily impatient.#
While in some interactions, the one-shot prisoner’s dilemma or public goods game, for example, one can denote strategies as either altruistic or not independently of the distribution of behaviors in a population, this is not generally the case.#
The repetition of the interaction (which happens with probability δ) is analogous to genetic relatedness as a support for cooperative behaviors.#
Multi-level selection may be of considerably greater importance among humans than among other animals given the advanced level of human cognitive and linguistic capabilities and consequent capacity to maintain group boundaries and to formulate general rules of behavior for large groups, and the resulting substantial influence of cultural inheritance on human behavior.#
An altruistic allele cannot proliferate if its bearers are no more likely to receive help from those with whom they interact than would occur by chance. All successful models of the evolution of altruistic behaviors share this positive assortment feature, including not only those stressing preferential interaction among siblings or other close genetic family members but also models of group competition for reproductive success.#
Glaeser et al. (2000) . . . found that experimental behavior was a quite good predictor of behavior outside the lab, while the usual measures of trust, based on survey questions, provided virtually no information.#
The self-interest axiom explains neither the frequency nor the effectiveness of punishment.#
With a short time horizon (10 periods) punishment promotes cooperation but lowers average payoffs, whereas with a long time horizon (50 periods) punishment increases the level of cooperation and average earnings.#
Punishing free-riders is itself a public good, and is no different from contributing to the public good itself; both confer benefits on others at a cost to oneself. . . . [Nevertheless] experimental subjects decline to contribute altruistically but once punishment is permitted they avidly engage in the altruistic activity of punishing low contributors.#
Optimizing models are commonly used to describe behavior not because they mimic the cognitive processes of the actors, which they rarely do, but because they capture important influences on individual behavior in a succinct and analytically tractable way.#
In light of these results [that humans have prosocial preferences], the evidence that the tragedy of the commons is sometimes averted and that collective action is a motor of human history is considerably less puzzling. The puzzle, instead, is how humans came to be like this.#
Institutions affect the rewards and penalties associated with particular behaviors, often favoring the adoption of cooperative actions over others, so that even the self-regarding are often induced to act in the interest of the group.#
Boundary-maintenance supported within-group cooperation and exchange by limiting group size and within-group linguistic, normative and other forms of heterogeneity . . . and we were able to construct social institutions that minimized the disadvantages of those with social preferences in competition with fellow group members, while heightening the group-level advantages associated with the high levels of cooperation that these social preferences allowed.#
These models [of altruism as “enlightened self-interest”] fail to explain two facts about human cooperation: that it takes place in groups far larger than the immediate family, and that both in real life and in laboratory experiments, it occurs in interactions that are unlikely to be repeated, and where it is impossible to obtain reputational gains from cooperating.#
While cooperation is common in many species, Homo sapiens is exceptional in that in humans cooperation extends beyond close genealogical kin to include even total strangers, and occurs on a much larger scale than other species except for the social insects.#
A great number of theories have been offered as to the root of the difference between the modern mind and the premodern mind. One neglected account comes from Georg Simmel’s Philosophy of Money, which argues that the rise of the mass money economy in the early modern era encouraged calculative . . .
Since Bitcoin’s invention in 2009, permissionless blockchain technology has gone through several waves of interest and development. While applications related to payments have advanced at breakneck speed, progress in financial and nonmonetary applications have largely failed to live up to initial excitement. This chapter considers the incentives facing network participants . . .
If there exist no incentive or selective mechanisms that make cooperation in large groups incentive-compatible under realistic circumstances, functional social institutions will require a divergence between subjective preferences and objective payoffs – a “noble lie”. This implies the existence of irreducible and irreconcilable “inside” and “outside” perspectives on social institutions; . . .
This paper offers an increasing returns model of the evolution of exchange institutions building on Smith’s dictum that “the division of labor is limited by the extent of the market”. Exchange institutions are characterized by a tradeoff between fixed and marginal costs: the effort necessary to execute an exchange may . . .
Human cooperation, I’ve argued before, is remarkable and unlikely. Even more remarkable is that it ever got beyond the tribal scale of a couple dozen to a couple hundred people, given that the institutions necessary to sustain cooperation at that scale are very different from those necessary to sustain anonymous . . .
A second pass at the themes in The Meta Level Doesn’t Justify Itself. I’ll roll the two together at some point in the indefinite future.
Imagine you need money, and somehow you find yourself sitting across from Warren Buffet pitching a new business venture.
From a purely self-interested perspective, your best scenario . . .