It is widely believed that experimental results of behavioral game theory undermine standard economic and game theory. This paper suggests that experimental results present serious theoretical modeling challenges, but do not undermine two pillars of contemporary economic theory: the rational actor model, which holds that individual choice can be modeled as maximization of an objective function subject to informational and material constraints, and the incentive compatibility requirement, which holds that macroeconomic quantities must be derived from the interaction and aggregation of (...) individual choices. However, we must abandon the notion that rationality implies self-regarding behavior and the assumption that contracts are costlessly enforced by third parties. (shrink)

The various behavioral disciplines model human behavior in distinct and incompatible ways. Yet, recent theoretical and empirical developments have created the conditions for rendering coherent the areas of overlap of the various behavioral disciplines. The analytical tools deployed in this task incorporate core principles from several behavioral disciplines. The proposed framework recognizes evolutionary theory, covering both genetic and cultural evolution, as the integrating principle of behavioral science. Moreover, if decision theory and game theory are broadened to encompass other-regarding preferences, they (...) become capable of modeling all aspects of decision making, including those normally considered “psychological,” “sociological,” or “anthropological.” The mind as a decision-making organ then becomes the organizing principle of psychology. (Published Online April 27 2007) Key Words: behavioral game theory; behavioral science; evolutionary theory; experimental psychology; gene-culture coevolution; rational actor model; socialization. (shrink)

This article shows that social norms are better explained as correlating devices for a correlated equilibrium of the underlying stage game, rather than Nash equilibria. Whereas the epistemological requirements for rational agents playing Nash equilibria are very stringent and usually implausible, the requirements for a correlated equilibrium amount to the existence of common priors, which we interpret as induced by the cultural system of the society in question. When the correlating device has perfect information, we need in addition only to (...) posit that individuals obey the social norm when it is costless to do so. When the correlating device has incomplete information, the operation of the social norm requires that individuals have a predisposition to follow the norm even when this is costly. The latter case explains why social norms are associated with other-regarding preferences and provides a basis for analyzing honesty and corruption. (shrink)

offers an evolutionary approach to morality, in which moral rules form a cultural system that is robust and evolutionarily stable. The folk theorem is the analytical basis for his theory of justice. I argue that this is a mistake, as the equilibria described by the folk theorem lack dynamic stability in games with several players. While the dependence of Binmore's argument on the folk theorem is more tactical than strategic, this choice does have policy implications. I do not believe that (...) moral rules are solutions to the Nash bargaining problem. Rather, I believe that human beings are emotionally constituted, by virtue of their evolutionary history, to embrace prosocial and altruistic notions of in-group–out-group identification and reciprocity. These aspects of human nature are incompatible with Binmore's notion that humans are self-regarding creatures. I present empirical evidence supporting a specific form of human, other-regarding preferences known as strong reciprocity. Key Words: justice • ethics • folk theorem • evolutionary game theory. (shrink)

Despite their distinct objects of study, the human behavioral sciences all include models of individual human behavior. Unity in the behavioral sciences requires that there be a common underlying model of individual human behavior, specialized and enriched to meet the particular needs of each discipline. Such unity does not exist, and cannot be easily attained, since the various disciplines have incompatible models and disparate research methodologies. Yet recent theoretical and empirical developments have created the conditions for unity in the behavioral (...) sciences, incorporating core principles from all fields, and based upon theoretical tools (game theory and the rational actor model) and data gathering techniques (experimental games in the laboratory and field) that transcend disciplinary boundaries. This article sketches a set of principles aimed at fostering such a unity. Key Words: behavioral science • game theory • experimental economics • rational actor model. (shrink)

Classical and evolutionary game theory attempt to explain different phenomena. Classical game theory describes socially and temporally isolated encounters while evolutionary game theory describes macro-social behavioural regularities. The actors in classical game theory are payoff maximizers whose identity remains fixed during the course of play. By contrast, in evolutionary game theory, the players are constantly changing, and the central actor is a replicator -- an entity having some means of making approximately accurate copies of itself. However successful in its own (...) realm, evolutionary game theory is ill-constructed to model the phenomena addressed by classical game theory. We must look to as yet undeveloped principles to achieve classical game theory's unfulfilled promise. I indicate a possibly fruitful step in this direction. (shrink)

The standard theories of cooperation in humans, which depend on repeated interaction and reputation effects among self-regarding agents, are inadequate. Strong reciprocity, a predisposition to participate in costly cooperation and the punishment, fosters cooperation where self-regarding behaviors fail. The effectiveness of socially coordinated punishment depends on individual motivations to participate, which are based on strong reciprocity motives. The relative infrequency of high-cost punishment is a result of the ubiquity of strong reciprocity, not its absence.

My response to commentators includes a suggestion that an additional principle be added to the list presented in the target article: the notion of human society as a complex adaptive system with emergent properties. In addition, I clear up several misunderstandings shared by several commentators, and explore some themes concerning future directions in the unification of the behavioral science. (Published Online April 27 2007).

Recent experimental research has revealed forms of human behavior involving interaction among unrelated individuals that have proven difficult to explain in terms of kin or reciprocal altruism. One such trait, strong reciprocity, is a predisposition to cooperate with others and to punish those who violate the norms of cooperation, at personal cost, even when it is implausible to expect that these costs will be repaid. We present evidence supporting strong reciprocity as a schema for predicting and understanding altruism in humans. (...) We show that under conditions plausibly characteristic of the early stages of human evolution, a small number of strong reciprocators could invade a population of self-regarding types, and strong reciprocity is an evolutionarily stable strategy. Although most of the evidence we report is based on behavioral experiments, the same behaviors are regularly described in everyday life, for example in wage setting by firms, tax compliance, and cooperation in the protection of local environmental public goods. (shrink)

Inclusive fitness theory provides conditions for the evolutionary success of a gene. These conditions ensure that the gene is selfish in the sense of Dawkins (The selfish gene, Oxford University Press, Oxford, 1976): genes do not and cannot sacrifice their own fitness on behalf of the reproductive population. Therefore, while natural selection explains the appearance of design in the living world (Dawkins in The blind watchmaker: why the evidence of evolution reveals a universe without design, W. W. Norton, New York, (...) 1996), inclusive fitness theory does not explain how. Indeed, Hamilton’s rule is equally compatible with the evolutionary success of prosocial altruistic genes and antisocial predatory genes, whereas only the former, which account for the appearance of design, predominate in successful organisms. Inclusive fitness theory, however, permits a formulation of the central problem of sociobiology in a particularly poignant form: how do interactions among loci induce utterly selfish genes to collaborate, or to predispose their carriers to collaborate, in promoting the fitness of their carriers? Inclusive fitness theory, because it abstracts from synergistic interactions among loci, does not answer this question. Fitness-enhancing collaboration among loci in the genome of a reproductive population requires suppressing alleles that decrease, and promoting alleles that increase the fitness of its carriers. Suppression and promotion are effected by regulatory networks of genes, each of which is itself utterly selfish. This implies that genes, and a fortiori individuals in a social species, do not maximize inclusive fitness but rather interact strategically in complex ways. It is the task of sociobiology to model these complex interactions. (shrink)

Baumard et al. mischaracterize our model of individual and social choice behavior. We model individuals who maximize preferences given their beliefs, and subject to their informational and material constraints (Fehr & Gintis 2007). Individuals thus must make trade-offs among self-regarding, other-regarding, and character virtue goals. Two genetic predispositions are particularly crucial. The first is strong reciprocity. The second is the capacity to internalize norms through the socialization process. Our model includes the authors' model as a subset.

If altruism requires self-control, people must consider altruistic acts as costly, the benefits of which will only be recouped in the future. By contrast, I shall present evidence that altruism is dictated by emotions: Altruists secure an immediate payoff from performing altruistic acts, so no element of self-control is present, and no future reward is required or expected.

Colman's critique of classical game theory is correct, but it is well known. Colman's proposed mechanisms are not plausible. Insufficient reason does what “team reasoning” is supposed to handle, and it applies to a broader set of coordination games. There is little evidence ruling out more traditional alternatives to Stackelberg reasoning, and the latter is implausible when applied to coordination games in general.

McCullough et al.'s target article is a psychological version of the reputation models pioneered by biologist Robert Trivers (1971) and economist Robert Frank (1988). The authors, like Trivers and Frank, offer an implausible explanation of the fact that revenge is common even when there are no possible reputational effects. I sketch a more plausible model based on recent research.

It is widely believed that experimental results of behavioral game theory undermine standard economic and game theory. This paper suggests that experimental results present serious theoretical modeling challenges, but do not undermine two pillars of contemporary economic theory: the rational actor model, which holds that individual choice can be modeled as maximization of an objective function subject to informational and material constraints, and the incentive compatibility requirement, which holds that macroeconomic quantities must be derived from the interaction and aggregation of (...) individual choices. However, we must abandon the notion that rationality implies self-regarding behavior and the assumption that contracts are costlessly enforced by third parties. (shrink)

Standard economic theory has told us for more than half a century that, to attain a high level of social welfare, there is no viable alternative to a market economy regulated by a powerful state. Critics often represent standard economic theory as a doctrinal defense of the free market. The truth is quite the opposite. Free market ideology is unfounded. Standard economic theory provides the proper framework for analyzing market failure. This theory must of course be supplemented by a theory (...) of state failure, as well as a theory of nonstate solutions to market failures. Standard economic theory offers a poor approach to macroeconomic dynamics, but we complexity and evolutionary theorists are working on correcting this situation. (shrink)

Are humans genetically predisposed to exhibit prosocial behaviours? Elliott Sober and David Sloan Wilson have made major contributions to our understanding of this question. In my remarks here I will propose a revision in their definition of altruism, suggest a broader term, ‘prosociality', to account for cooperation in humans, and present evidence for a particular set of human prosocial traits that likely evolved with our species and may account for our unique ability to maintain intricate cooperative networks not based on (...) ties of kinship. (shrink)

Moral judgments often affect scientific judgments in real-world contexts, but Knobe's examples in the target article do not capture this phenomenon.

Recent experimental research has revealed forms of human behavior involving interaction among unrelated individuals that have proven difficult to explain in terms of kin or reciprocal altruism. One such trait, strong reciprocity, is a predisposition to cooperate with others and to punish those who violate the norms of cooperation, at personal cost, even when it is implausible to expect that these costs will be repaid. We present evidence supporting strong reciprocity as a schema for predicting and understanding altruism in humans. (...) We show that under conditions plausibly characteristic of the early stages of human evolution, a small number of strong reciprocators could invade a population of self-regarding types, and strong reciprocity is an evolutionarily stable strategy. Although most of the evidence we report is based on behavioral experiments, the same behaviors are regularly described in everyday life, for example in wage setting by firms, tax compliance, and cooperation in the protection of local environmental public goods. (shrink)

Methodological practices differ between economics and psychology because economists use game theory as the basis for the design and interpretation of experiments, while psychologists do not. This methodological choice explains the “four key variables” stressed by Hert-wig and Ortmann. Game theory is currently the most rigorous basis for modeling strategic choice.

Behavioral economics has rejuvenated economic theory and deepened the bonds between economic theory and the other social sciences. Neoclassical economics does not depend on individual preferences being self-regarding. Moreover, in market contexts, laboratory experiments indicate that traditional theory works well. Behavioral economic findings thus enrich and expand neoclassical economics rather than undermining it. In particular, social norms are an emergent property of human sociality, and exist as macrosocial structures that are not reducible to the preferences of individuals. Behavioral economists are (...) not theorists, but rather experimentalists. With few exceptions, they do not provide, nor aim to provide, cogent models for the phenomena they discover. Far from downplaying “inconvenient facts,” as is the practice of traditional economic theory, behavioral economists relish finding novel forms of individual decision-making and strategic behavior. (shrink)

We consider two reasons why firms should be owned and run democratically by their workers. The first concerns accountability : Because the employment relationship involves the exercise of power, its governance should on democratic grounds be accountable to those most directly affected. The second concerns efficiency : The democratic firm uses a lower level of inputs per unit of output than the analogous capitalist firm.

We consider two reasons why firms should be owned and run democratically by their workers. The first concernsaccountability: Because the employment relationship involves the exercise of power, its governance should on democratic grounds be accountable to those most directly affected. The second concernsefficiency: The democratic firm uses a lower level of inputs per unit of output than the analogous capitalist firm.

Recent investigations have uncovered large, consistent deviations from the predictions of the textbook representation of Homo economicus (Roth et al, 1992, Fehr and Gächter, 2000, Camerer 2001). One problem appears to lie in economists’ canonical assumption that individuals are entirely self-interested: in addition to their own material payoffs, many experimental subjects appear to care about fairness and reciprocity, are willing to change the distribution of material outcomes at personal cost, and reward those who act in a cooperative manner while punishing (...) those who do not even when these actions are costly to the individual. These deviations from what we will term the canonical model have important consequences for a wide range of economic phenomena, including the optimal design of institutions and contracts, the allocation of property rights, the conditions for successful collective action, the analysis of incomplete contracts, and the persistence of noncompetitive wage premia. Fundamental questions remain unanswered. Are the deviations from the canonical model evidence of universal patterns of behavior, or do the individual’s economic and social environments shape behavior? If the latter, which economic and social conditions are involved? Is reciprocal behavior better explained statistically by individuals’ attributes such as their sex, age, or relative wealth, or by the attributes of the group to which the individuals belong? Are there cultures that approximate the canonical account of self-regarding behavior? Existing research cannot answer such questions because virtually all subjects have been university students, and while there are cultural differences among student populations throughout the world, these differences are small compared to the range of all social and cultural environments. To address the above questions, we and our collaborators undertook a large cross-cultural study of behavior in ultimatum, public good, and dictator games.. (shrink)

Is the United States "the land of equal opportunity" or is the playing field tilted in favor of those whose parents are wealthy, well educated, and white? If family background is important in getting ahead, why? And if the processes that transmit economic status from parent to child are unfair, could public policy address the problem? Unequal Chances provides new answers to these questions by leading economists, sociologists, biologists, behavioral geneticists, and philosophers.New estimates show that intergenerational inequality in the United (...) States is far greater than was previously thought. Moreover, while the inheritance of wealth and the better schooling typically enjoyed by the children of the well-to-do contribute to this process, these two standard explanations fail to explain the extent of intergenerational status transmission. The genetic inheritance of IQ is even less important. Instead, parent-offspring similarities in personality and behavior may play an important role. Race contributes to the process, and the intergenerational mobility patterns of African Americans and European Americans differ substantially.Following the editors' introduction are chapters by Greg Duncan, Ariel Kalil, Susan E. Mayer, Robin Tepper, and Monique R. Payne; Bhashkar Mazumder; David J. Harding, Christopher Jencks, Leonard M. Lopoo, and Susan E. Mayer; Anders Björklund, Markus Jäntti, and Gary Solon; Tom Hertz; John C. Loehlin; Melissa Osborne Groves; Marcus W. Feldman, Shuzhuo Li, Nan Li, Shripad Tuljapurkar, and Xiaoyi Jin; and Adam Swift. (shrink)

What motives underlie the ways humans interact socially? Are these the same for all societies? Are these part of our nature, or influenced by our environments?Over the last decade, research in experimental economics has emphatically falsified the textbook representation of Homo economicus. Literally hundreds of experiments suggest that people care not only about their own material payoffs, but also about such things as fairness, equity and reciprocity. However, this research left fundamental questions unanswered: Are such social preferences stable components of (...) human nature; or, are they modulated by economic, social and cultural environments? Until now, experimental research could not address this question because virtually all subjects had been university students, and while there are cultural differences among student populations throughout the world, these differences are small compared to the full range of human social and cultural environments. A vast amount of ethnographic and historical research suggests that people's motives are influenced by economic, social, and cultural environments, yet such methods can only yield circumstantial evidence about human motives. Combining ethnographic and experimental approaches to fill this gap, this book breaks new ground in reporting the results of a large cross-cultural study aimed at determining the sources of social preferences that underlie the diversity of human sociality. The same experiments which provided evidence for social preferences among university students were performed in fifteen small-scale societies exhibiting a wide variety of social, economic and cultural conditions by experienced field researchers who had also done long-term ethnographic field work in these societies. The findings of these experiments demonstrated that no society in which experimental behaviour is consistent with the canonical model of self-interest. Indeed, results showed that the variation in behaviour is far greater than previously thought, and that the differences between societies in market integration and the importance of cooperation explain a substantial portion of this variation, which individual-level economic and demographic variables could not. Finally, the extent to which experimental play mirrors patterns of interaction found in everyday life is traced.The book starts with a succinct but substantive introduction to the use of game theory as an analytical tool and its use in the social sciences for the rigorous testing of hypotheses about fundamental aspects of social behaviour outside artificially constructed laboratories. The results of the fifteen case studies are summarized in a suggestive chapter about the scope of the project. (shrink)

Researchers from across the social sciences have found consistent deviations from the predictions of the canonical model of self-interest in hundreds of experiments from around the world. This research, however, cannot determine whether the uniformity results from universal patterns of human behavior or from the limited cultural variation available among the university students used in virtually all prior experimental work. To address this, we undertook a cross-cultural study of behavior in ultimatum, public goods, and dictator games in a range of (...) small-scale societies exhibiting a wide variety of economic and cultural conditions. We found, first, that the canonical model – based on self-interest – fails in all of the societies studied. Second, our data reveal substantially more behavioral variability across social groups than has been found in previous research. Third, group-level differences in economic organization and the structure of social interactions explain a substantial portion of the behavioral variation across societies: the higher the degree of market integration and the higher the payoffs to cooperation in everyday life, the greater the level of prosociality expressed in experimental games. Fourth, the available individual-level economic and demographic variables do not consistently explain game behavior, either within or across groups. Fifth, in many cases experimental play appears to reflect the common interactional patterns of everyday life. Key Words: altruism; cooperation; cross-cultural research; experimental economics; game theory; ultimatum game; public goods game; self-interest. (shrink)

We would like to thank the commentators for their generous comments, valuable insights and helpful suggestions. We begin this response by discussing the selfishness axiom and the importance of the preferences, beliefs, and constraints framework as a way of modeling some of the proximate influences on human behavior. Next, we broaden the discussion to ultimate-level (that is evolutionary) explanations, where we review and clarify gene-culture coevolutionary theory, and then tackle the possibility that evolutionary approaches that exclude culture might be sufficient (...) to explain the data. Finally, we consider various methodological and epistemological concerns expressed by our commentators. (shrink)