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Public Goods Games, Altruism, and Evolution

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Abstract

How can a desire to cooperate in one-shot interactions survive, even though it gives a material disadvantage to its carrier? I analyze this issue using a one-shot public goods game between two altruistic individuals. Within a pair, the least altruistic individual is better off materially. Between pairs, individuals in the pair with the highest degree of altruism are better off materially. I determine the evolutionarily stable degree of altruism, allowing for assortative matching. The stable degree of altruism is strictly smaller than the degree of assortativity, and it may be negative. It is also increasing in the degree of assortativity. For a given degree of assortativity, the stable degree of altruism depends on the relative strength of the within-pair and the between-group e¤ect on material welfare. This relative strength in turn depends on the production and cost functions in the underlying public goods game.

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File URL: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9779.2010.01474.x/pdf
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Bibliographic Info

Paper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 09-06.

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Length: 30 pages
Date of creation: 26 Aug 2009
Date of revision: 01 Feb 2010
Publication status: Published: Revised version in Journal of Public Economic Theory, Vol. 12, No. 4 (August 2010), pp. 789–813
Handle: RePEc:car:carecp:09-06

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Keywords: public goods; teamwork; altruism; evolution of preferences; evolutionary stability;

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References

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  1. Donald Cox & Bruce E. Hansen & Emmanuel Jimenez, 1997. "How Responsive are Private Transfers to Income? Evidence from a Laissez-Faire Economy," Boston College Working Papers in Economics 341., Boston College Department of Economics, revised 01 Dec 1999.
  2. James M. Walker & Matthew A. Halloran, 2004. "Rewards and Sanctions and the Provision of Public Goods in One-Shot Settings," Experimental Economics, Springer, vol. 7(3), pages 235-247, October.
  3. Jörg Oechssler & Frank Riedel, 2000. "On the Dynamic Foundation of Evolutionary Stability in Continuous Models," Bonn Econ Discussion Papers bgse7_2000, University of Bonn, Germany.
  4. Guido Tabellini, 2008. "The Scope of Cooperation: Values and Incentives," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 905-950, August.
  5. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February.
  6. Robin P. Cubitt & Michalis Drouvelis & Simon Gächter, 2008. "Framing and Free Riding: Emotional Responses and Punishment in Social Dilemma Games," Discussion Papers 2008-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  7. Bergstrom, Theodore C, 1995. "On the Evolution of Altruistic Ethical Rules for Siblings," American Economic Review, American Economic Association, vol. 85(1), pages 58-81, March.
  8. Ingela Alger & J�rgen W. Weibull, 2010. "Kinship, Incentives, and Evolution," American Economic Review, American Economic Association, vol. 100(4), pages 1725-58, September.
  9. Theodore C. Bergstrom, 2002. "Evolution of Social Behavior: Individual and Group Selection," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 67-88, Spring.
  10. Bolle, Friedel, 2000. "Is altruism evolutionarily stable? And envy and malevolence?: Remarks on Bester and Guth," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 131-133, May.
  11. Jung-Kyoo Choi, 2008. "Play locally, learn globally: group selection and structural basis of cooperation," Journal of Bioeconomics, Springer, vol. 10(3), pages 239-257, December.
  12. B. Curtis Eaton & Mukesh Eswaran & Robert J. Oxoby, 2011. "Us and `Them': the origin of identity, and its economic implications," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 719-748, August.
  13. repec:fth:iniesr:557 is not listed on IDEAS
  14. Possajennikov, Alex, 2000. "On the evolutionary stability of altruistic and spiteful preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 125-129, May.
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Cited by:
  1. Ingela Alger & Donald Cox, 2013. "The evolution of altruistic preferences: mothers versus fathers," Review of Economics of the Household, Springer, vol. 11(3), pages 421-446, September.
  2. Alger, Ingela & Weibull, Jörgen, 2012. "Homo Moralis-Preference evolution under incomplete information and assortative matching," LERNA Working Papers 12.17.374, LERNA, University of Toulouse.
  3. repec:aia:ginidp:dp17 is not listed on IDEAS
  4. Giacomo Corneo, 2011. "GINI DP 17: Income Inequality, Value Systems and Macroeconomic Performance," GINI Discussion Papers 17, AIAS, Amsterdam Institute for Advanced Labour Studies.
  5. Ingela Alger & Jörgen W. Weibull, 2010. "Evolutionary Stability, Co-operation and Hamilton’s Rule," Carleton Economic Papers 10-11, Carleton University, Department of Economics, revised 18 Jan 2011.

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