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Norm Compliance and Strong Reciprocity

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Author Info
Rajiv Sethi
E. Somanathan

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Abstract

Strong reciprocity refers to the willingness to sacrifice one's own material self-interest to punish others for opportunistic actions. This propensity provides a decentralized mechanism for the enforcement of social norms, but its extent and persistence poses a theoretical puzzle. Since opportunistic individuals choose optimally to comply with or violate norms based on the likelihood and severity of sanctioning they anticipate, such individuals will always outperform reciprocators within any group. The presence of reciprocators in a group can, however, alter the behavior of opportunists in such a manner as to benefit all members of the group (including reciprocators). We show that under these circumstances, reciprocators can invade a population of opportunists when groups dissolve and are formed anew according to a process of purely random (non-assortative) matching. Furthermore, even when these conditions are not satisfied (so that an opportunistic population is stable) there may exist additional stable population states in which reciprocators are present.

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Paper provided by Santa Fe Institute in its series Working Papers with number 01-09-048.

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Date of creation: Sep 2001
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Handle: RePEc:wop:safiwp:01-09-048

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Keywords: Reciprocity; social norms; evolutionary stability;

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  1. Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers iewwp040, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  2. Sethi, Rajiv & Somanathan, E., 2001. "Preference Evolution and Reciprocity," Journal of Economic Theory, Elsevier, vol. 97(2), pages 273-297, April. [Downloadable!] (restricted)
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  3. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-88, September. [Downloadable!] (restricted)
  4. Dufwenberg, M. & Kirchsteiger, G., 1998. "A theory of sequential reciprocity," Discussion Paper 37, Tilburg University, Center for Economic Research. [Downloadable!]
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  5. Sethi, Rajiv, 1996. "Evolutionary stability and social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 29(1), pages 113-140, January. [Downloadable!] (restricted)
  6. repec:att:wimass:199325 is not listed on IDEAS
  7. Gary Charness & Matthew Rabin, 1999. "Social Preferences: Some Simple Tests and a New Model," Economics Working Papers 441, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000. [Downloadable!]
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  8. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
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  9. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July. [Downloadable!] (restricted)
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  10. Robson, A.J., 1989. "Efficiency In Evolutionary Games: Darwin, Nash And Secret Handshake," Papers 89-22, Michigan - Center for Research on Economic & Social Theory.
  11. Herbert Gintis, 2000. "Strong Reciprocity and Human Sociality," Working Papers 2000-02, University of Massachusetts Amherst, Department of Economics. [Downloadable!]
  12. Huck, Steffen & Oechssler, Jorg, 1999. "The Indirect Evolutionary Approach to Explaining Fair Allocations," Games and Economic Behavior, Elsevier, vol. 28(1), pages 13-24, July. [Downloadable!] (restricted)
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  13. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February. [Downloadable!] (restricted)
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  14. Gary E. Bolton & Axel Ockenfels, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March. [Downloadable!] (restricted)
  15. Rajiv Sethi & E.Somanathan, 2002. "Understanding reciprocity," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 02-05, Indian Statistical Institute, New Delhi, India. [Downloadable!]
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  16. Samuel Bowles & Herbert Gintis, 2000. "The Evolution of Reciprocal Preferences," Working Papers 00-12-072, Santa Fe Institute.
  17. Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, vol. 77(4), pages 593-604, September. [Downloadable!] (restricted)
  18. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February. [Downloadable!] (restricted)
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  19. Guth, Werner, 1995. "An Evolutionary Approach to Explaining Cooperative Behavior by Reciprocal Incentives," International Journal of Game Theory, Springer, vol. 24(4), pages 323-44.
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  1. César A.Salazar & Mauricio G.Villena, 2005. "Evolución de preferencias bajo escenarios de información completa e incompleta: teoría y evidencia experimental," Estudios de Economia, University of Chile, Department of Economics, vol. 32(2 Year 20), pages 159-186, December. [Downloadable!]
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