We present a new method for quantitatively documenting concerns for economic fairness. In particular we focus on the method’s potential for identifying variation in
prosociality within and across societies. Specifically, we conducted multiple dictator games per player in two small-scale societies. Each game presented the decision maker with a choice between an equitable and an inequitable payoff distribution. The games varied in terms of the type of inequality the decision maker faced and in terms of
the cost to the decision maker of eliminating inequality. This latter variation in cost is what makes the method suitable for identifying the price one is willing to pay for
equality. To analyze the data, we developed a novel set of statistical models that directly link experimental results and player heterogeneity with the formal theory of
inequality aversion. The paper concludes with a discussion of how the experimental method can be generalized to allow maximum flexibility in data analysis.
Human cooperation is unparalleled in the animal world and rests on an altruistic concern for the welfare of genetically unrelated strangers. The evolutionary roots of human altruism, however, remain poorly understood. Recent evidence suggests a discontinuity between humans and other primates because individual chimpanzees do not spontaneously
provide food to other group members, indicating a lack of concern for their welfare. Here, we demonstrate that common marmoset monkeys (Callithrix jacchus) do spontaneously
provide food to non-reciprocating and genetically unrelated individuals, indicating that other-regarding preferences are not unique to humans and that their evolution did not
require advanced cognitive abilities such as theory of mind. Because humans and marmosets are cooperative breeders and the only two primate taxa in which such unsolicited prosociality has been found, we conclude that these prosocial predispositions may emanate from cooperative breeding.
All known human societies establish social order by punishing violators of social norms. However, little is known about how the human brain processes the punishment threat associated with norm violations. We use fMRI to study the neural circuitry behind forced norm compliance by comparing a treatment in which norm violations can be punished with a control treatment in which punishment is impossible. Individuals’ increase in norm compliance when punishment is possible exhibits a strong positive correlation with activations in the lateral orbitofrontal cortex and right dorsolateral prefrontal cortex. These
activations are also modulated by the social nature of the task. Moreover, activation in lateral orbitofrontal cortex shows a strong positive correlation with Machiavellian personality characteristics. These findings indicate a neural network involved in forced norm compliance that may constitute an important basis for human sociality. Different activations of this network reveal individual differences in the behavioral response to the punishment threat and may thus provide a deeper understanding of the neurobiological sources of pathologies such as antisocial personality disorder.
Human social interaction is strongly shaped by other-regarding preferences. These preferences are key for a unique aspect of human sociality – large scale cooperation with genetic strangers – but little is known about their developmental roots. We show here that young children’s other-regarding preferences assume a particular form – inequality aversion – that develops strongly between the ages of 3 and 8. At age 3-4, the overwhelming majority of children behave selfishly, while the vast majority at age 7-8 prefers resource allocations that remove advantageous or disadvantageous inequality. Moreover, inequality aversion is strongly shaped by parochialism, a preference for favouring the members of one’s own social group. These results indicate that human egalitarianism and parochialism have deep developmental roots, and the simultaneous
emergence of altruistic sharing and parochialism during childhood is intriguing in view of recent evolutionary theories which predict that the same evolutionary process jointly drives both human altruism and parochialism.
Low frequency “off-line” repetitive transcranial magnetic stimulation (rTMS) over the course of several minutes has attained considerable attention as a research tool in cognitive neuroscience due to its ability to induce functional disruptions of brain areas. This disruptive rTMS effect is highly valuable for revealing a causal relationship between brain and behavior. However, its influence on remote interconnected areas and, more importantly, the duration of the induced neurophysiological effects, remain unknown. These aspects are critical for a study design in the context of cognitive neuroscience. In order to investigate these issues, 12 healthy male subjects underwent 8 H215O positron emission tomography (PET) scans after application of long-train low frequency rTMS to the right dorsolateral prefrontal cortex (DLPFC). Immediately after the stimulation train, regional cerebral blood flow (rCBF) increases were present under the stimulation site as well as in other prefrontal cortical areas, including the ventrolateral prefrontal cortex (VLPFC) ipsilateral to the stimulation site. The mean increases in rCBF returned to baseline within nine minutes. The duration of this unilateral prefrontal rTMS effect on rCBF is of particular interest to those who aim to influence behavior in cognitive paradigms that use an “off-line” approach.
Much evidence suggests that people are heterogeneous with regard to their abilities to make rational, forward-looking decisions. This raises the question as to when the rational types are decisive for aggregate outcomes and when the boundedly rational types shape aggregate results. We examine this question in the context of a long-standing and important economic problem: the adjustment of nominal prices after an anticipated monetary shock. Our experiments suggest that two types of bounded rationality – money illusion and anchoring – are important behavioral forces behind nominal inertia. However, depending on the strategic environment, bounded rationality has vastly different effects on aggregate price adjustment. If agents’ actions are strategic substitutes, adjustment to the new equilibrium is extremely quick, whereas under strategic complementarity, adjustment is both very slow and associated with relatively large real effects. This adjustment difference is driven by price expectations, which are very flexible and forward-looking under substitutability but adaptive and sticky under complementarity. Moreover, subjects’ expectations are also considerably more rational under substitutability. KEYWORDS: Bounded rationality, strategic substitutes, strategic complements, money illusion, anchoring, nominal rigidity, sticky prices.
