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Identity and altruism: The Moral basis of prosperity and oppression

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Author Info
Kaushik Basu () (Cornell University, Indian Statistical Institute, New Delhi)
Abstract

Much of economics is built on the assumption of individuals being driven by self-interest and economic development as an outcome of the free play of such individuals. On the few occasions that economics recognizes the role of altruism and trust, the tendency is to build these from the axiom of individually selfishness. The aim of this paper is to break away from this individualistic tradition and to treat as a primitive that individuals have hard-wired in them the `cooperative spirit', which allows them often to work in their collective interest, even when that may not be in their self-interest. The main objective of the paper is to track the interface between altruism and group identity. By using the basic structure of a Prisoner's Dilemma game among randomly picked individuals and building into it assumptions of general or in-group altruism, the paper demonstrates how our selfish rationality interacts with our innate sense of cooperation. The model is used to outline circumstances under which cooperation will occur and circumstances where it will break down. The paper also studies how sub-groups of a society can form cooperative blocks, whether to simply do better for themselves or exploit others.

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Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 08-08.

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Length: 30 pages
Date of creation: Nov 2007
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Handle: RePEc:ind:isipdp:08-08

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Related research
Keywords: cooperative spirit; altruism; identity; development; Prisoner's Dilemma;

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  1. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June. [Downloadable!] (restricted)
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  2. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination In A Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 351-377, February. [Downloadable!] (restricted)
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  3. Fehr, Ernst & Falk, Armin, 2002. "Psychological Foundations of Incentives," IZA Discussion Papers 507, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Ernst Fehr & Simon Gachter, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September. [Downloadable!] (restricted)
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  5. Benabou, Roland & Tirole, Jean, 2003. "Incentives and Prosocial Behavior," IDEI Working Papers 389, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jan 2006. [Downloadable!]
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  6. Frank, Robert H & Gilovich, Thomas & Regan, Dennis T, 1993. "Does Studying Economics Inhibit Cooperation?," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 159-71, Spring. [Downloadable!] (restricted)
  7. Sandeep Baliga & Tomas Sj–str–m, 2004. "Arms Races and Negotiations," Review of Economic Studies, Blackwell Publishing, vol. 71(2), pages 351-369, 04. [Downloadable!] (restricted)
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  8. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August. [Downloadable!] (restricted)
  9. Kaushik Basu, 2005. "Racial conflict and the malignancy of identity," Journal of Economic Inequality, Springer, vol. 3(3), pages 221-241, December. [Downloadable!] (restricted)
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  10. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December. [Downloadable!] (restricted)
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