Beyond Enlightened Self-Interest: Social Norms, Other-Regarding Preferences, and Cooperative Behavior

Abstract

Both economists and biologists have developed repeated interaction models of cooperation in social dilemmas with groups of self-regarding individuals. Repeated interactions do provide opportunities for cooperative individuals to discipline defectors, and may be effective in groups of two individuals. However, these models are inadequate for groups of larger size, making plausible assumptions about the information available to each individual. Moreover, even presupposing extraordinary cognitive capacities and levels of patience among the cooperating individuals, it is unlikely that a group of more than two individuals would ever adopt the cooperative equilibria that the models have identified, and almost certainly, if it were to adopt one, its members would abandon it in short order. Though intended as models of decentralized interaction, the models by which self-regarding Homo economicus is said to cooperate implicitly presume implausible levels of coordination such as might in the real world be provided by social norms. The inadequacy of these models, coupled with extensive experimental and other empirical evidence of human cooperation suggests that other-regarding preferences in the context of social norms that facilitate and direct human cooperation must be part of an adequate explanation.