Reinterpreting the General Rules of Morality and the Corruption of Moral Sentiments in The Theory of Moral Sentiments with an Evolutionary Game Model

Adam Smith is the author of An Inquiry into the Nature and Causes of the Wealth of Nations. He is known mainly as a pioneer of political economy. However, he was not only an economist but also a moral philosopher. He published The Theory of Moral Sentiments (TMS) in 1759. In TMS, he explained an establishment of a social order based on sympathy between people in a society. Sympathy is sharing of sentiments with others by imaginarily swapping situations with others. People in TMS form the impartial spectator and regulate their conduct to be sympathized by the impartial spectator. The impartial spectator is often considered as an important concept in TMS. However, even if people formed the impartial spectator, this does not mean that they can always regulate their conduct. To regulate their conduct absolutely, people need general rules of morality (GRM). People can establish a social order thanks to GRM. Some preceding studies have reinterpreted TMS with various research results in contemporary economics. For example, Meardon & Ortmann (1996) reinterprets self-command by using a repeated game theory model. Ashraf et al. (2005) indicates that Smith foresaw some research findings of behavioral economics. Tajima (2007) reinterprets TMS from a perspective of institutional economics. Breban (2012) formularizes a behavior of people in TMS with a utility function, and compares this function with utility functions in behavioral economics. Khalil (2017) reinterprets TMS from a perspective of rational choice theory. These reinterpretations have shed light on modern significance of TMS. However, there is room for reinterpreting important concepts in TMS with research results in contemporary economics. Following the preceding studies, this paper reinterprets the GRM formation process and the corruption of moral sentiments (CMS) by using a replicator dynamics model, which is a basic model of evolutionary game theory. GRM are the social norms in TMS that concern what is fit and proper either to be done or to be avoided. In TMS, people form GRM through interactions with others. They continually observe conduct of others, and this can lead them to form certain GRM. This paper interprets this observation process as a trial-and-error learning process. To formularize this process, this paper uses a replicator dynamics model. The results of the model clarify the character of sympathy in the CRM. The more sympathetic players exist in a player set, the more corrupted situation is likely to be realized. This result mathematically supports an interpretation in preceding studies (Brown 1994, Griswold 1999) that sympathy involves risk that CMS is progressing. The paper is organized as follows. In the section 2, we briefly describe GRM and the CMS. In the section 3, we construct a model of replicator dynamics. In the section 4, we discuss the results of the model. In the last section, we conclude this paper.