On the Nature, Modeling, and Neural Bases of Social Ties

Purpose: This paper addresses the nature, formalization, and neural bases of (affective) social ties anddiscusses the relevance of ties for health economics. A social tie is defined as an affectiveweight attached by an individual to the well-being of another individual ('utilityinterdependence'). Ties can be positive or negative, and symmetric or asymmetric betweenindividuals. Characteristic of a social tie, as conceived of here, is that it develops over timeunder the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is notrelated to strategic behavior such as reputation formation but seen as generated by affectiveresponses. Methodology/approach: A formalization is presented together with some supportive evidence from behavioralexperiments. This is followed by a discussion of related psychological constructs and thepresentation of suggestive existing neural findings. To help prepare the grounds for a modelbasedneural analysis some speculations on the neural networks involved are provided, togetherwith suggestions for future research. Findings: Social ties are not only found to be important from an economic viewpoint, it is also shownthat they can be modeled and related to neural substrates. This discussion paper has resulted in a chapter in 'Neuroeconomics - Advances in Health Economics and Health Services Research' , 2008, 20, 125-59.