Social dilemmas among unequals
Hauser, OP; Hilbe, C; Chatterjee, K; et al.Nowak, MA
Date: 14 August 2019
Journal
Nature
Publisher
Nature Research
Publisher DOI
Abstract
Direct reciprocity is a powerful mechanism for evolution of cooperation, based on repeated
interactions. It requires that interacting individuals are sufficiently equal, such that
everyone faces similar consequences when they cooperate or defect. Yet inequality is ubiquitous
among humansand is generally considered to undermine ...
Direct reciprocity is a powerful mechanism for evolution of cooperation, based on repeated
interactions. It requires that interacting individuals are sufficiently equal, such that
everyone faces similar consequences when they cooperate or defect. Yet inequality is ubiquitous
among humansand is generally considered to undermine cooperation and welfar. Most previous models of reciprocity neglect inequality. They assume that
individuals are the same in all relevant aspects. Here we introduce a general framework
to study direct reciprocity among unequals. Our model allows for multiple sources of inequality.
Subjects can differ in their endowments, their productivities, and in how much
they benefit from public goods. We find that extreme inequality prevents cooperation. But
if subjects differ in productivity, some endowment inequality can be necessary for cooperation
to prevail. Our mathematical predictions are supported by a behavioral experiment
where we vary the subjects’ endowments and their productivities. We observe that overall
welfare is maximized when the two sources of heterogeneity are aligned, such that more
productive individuals receive higher endowments. In contrast, when endowments and
productivities are misaligned, cooperation quickly breaks down. Our findings have implications
for policy-makers concerned with equity, efficiency, and public goods provisioning.
Economics
Faculty of Environment, Science and Economy
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