Punishment, Rational Expectations, and Relative Payoffs in a Networked Prisoners Dilemma

Conference paper

Abstract

Experimental economics has consistently revealed human behavior at odds with theoretical expectations of rational agents. This is especially true in laboratory games with costly punishment where humans routinely pay to punish others for selfish behavior even though the punisher receives no benefit in return. This phenomenon occurs even when interactions are anonymous and the punisher will never interact with the punishee again. However, costly punishment may not be inconsistent with Darwinian notions of relative fitness. This paper presents exploratory work aimed at a reconciliation between economic and biological expectations of behavior. Agent-based modelling is used to simulate networked populations whose members play the prisoners dilemma while having the ability to altruistically punish one another. Results show that behavior evolving in structured populations does not conform to economic expectations of evolution driven by absolute payoff maximization. Instead results better match behavior expected from a biological perspective in which evolution is driven by relative payoff maximization. Results further suggest that subtle effects of network structure must be considered in theories addressing individual economic behavior.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Bowles S, Gintis H (2004) The evolution of strong reciprocity: cooperation in heterogeneous populations. Theor Popul Biol 6517–28MATHCrossRefGoogle Scholar
  2. 2.
    Boyd R, Gintis H, Bowles S(2003) The evolution of altruistic punishment. Proc Natl Acad Sci USA 1003531–3535CrossRefGoogle Scholar
  3. 3.
    Fowler J H (2005) Altruistic punishment and the origin of cooperation. Proc Natl Acad Sci USA 1027047–7049CrossRefGoogle Scholar
  4. 4.
    Andreoni J, Harbaugh W, Vesterlund L (2003) The carrot or the stick: Rewards, punishments, and cooperation. Am Econ Rev 93893–902CrossRefGoogle Scholar
  5. 5.
    Gürerk ö, Irlenbusch B, Rockenbach B (2006) The competitive advantage of sanctioning institutions. Science 312108–111CrossRefGoogle Scholar
  6. 6.
    Fehr E, Fischbacher U (2004) Third-party punishment and social norms. Evol Hum Behav 2563–87CrossRefGoogle Scholar
  7. 7.
    Fehr E, Gächter S (2000) Cooperation and punishment in public goods experiments. Am Econ Rev 90980–994CrossRefGoogle Scholar
  8. 8.
    Fehr E, Gächter S (2002) Altruistic punishment in humans. Nature 415137–140CrossRefGoogle Scholar
  9. 9.
    Ostrom E, Walker J, Gardner R (1992) Covenants with and without a Sword - Self-Governance Is Possible. Am Polit Sci Rev 86404–417CrossRefGoogle Scholar
  10. 10.
    McAdams R H (1992) Relative Preferences. Yale Law J 1021–104CrossRefGoogle Scholar
  11. 11.
    Shutters S T (2008) Strong reciprocity, social structure, and the evolution of fair allocations in a simulated ultimatum game. Computational Math Organ Theory, In Press, publ online 23-Oct-2008, DOI 10.1007/s10588-008-9053-zGoogle Scholar
  12. 12.
    Killingback T, Doebeli M (2002) The continuous prisoner's dilemma and the evolution of cooperation through reciprocal altruism with variable investment. American Naturalist 160421–438CrossRefGoogle Scholar
  13. 13.
    Ohtsuki H, Hauert C, Lieberman E(2006) A simple rule for the evolution of cooperation on graphs and social networks. Nature 441502–505CrossRefGoogle Scholar
  14. 14.
    Watts D J, Strogatz S H (1998) Collective dynamics of 'small-world' networks. Nature 393440–442CrossRefGoogle Scholar
  15. 15.
    Veblen T (1898) Why is economics not an evolutionary science? Quart J Econ 12373–397CrossRefGoogle Scholar

Copyright information

© Springer-Verlag US 2009

Authors and Affiliations

  1. 1.Arizona State UniversityTempe

Personalised recommendations