Good people… but not that good

(featured image: User18526052 via Freepik)

The good news is that we are prosocial; in other news, it comes with strings and conditions attached

Take a look around you. Unless you’re in the middle of a nature reserve, miles from human settlements, most of what you see is the result of people working together – buildings, machines, clothes, food, transportation, you name it. And even beyond the stuff that is constructed, or made in factories, we can see collaborative efforts everywhere.

Think of the arts (yes, orchestras and bands obviously, but even solo musical artists rely on others to get their music to their audiences), or of sports (yes, team sports obviously, but individual athletes too rely on others to coach them or supply them with tennis rackets or track spikes).

This tendency to collaborate with others to achieve more is not something that is unique to humans. In The Social Instinct, Nichola Raihani describes how it has been instrumental in the development of many species in the natural world – including us. Arguably, it is precisely because of our highly sophisticated social instinct that we discovered the principle of division of labour, and have become as successful as we are.

This allowed us to collaborate in ways that were not just transactional or rule-based, but often driven by deliberate strategic thinking, especially in economic interactions. Both between businesses, and between companies and consumers this is largely thanks to trust, goodwill and reciprocity. We all trust others to do things for us that we do not want to, or are unable to do ourselves, and to do them reliably, competently and honestly, and they trust us to compensate them fairly – and vice versa.

We don’t even necessarily always expect a clear quid pro quo: we also collectively ensure the provision of public goods and common pool resources. (Public goods are both non-rivalrous, which means that consumption by one individual does not reduce the amount available to consume to others, and non-excludable, i.e., individuals who have not contributed cannot be prevented from using it. Street lighting is an often-cited example. Common pool resources are similar in that they are also available to everyone, but excessive use can lead to a reduction of availability, like on public roads or in parks or schools.)

In sum, we seem to be pretty much good, intrinsically cooperative people, and that is why we have it as good as we do. Or are we?

Are you from my parish?

[Plenty of public goods, at least here in my parish (image: Roel Wijnants/Flickr CC BY NC 2.0)]

Such cooperation can naturally only deliver optimum results if there are no impediments to it, such as legal barriers to international trade, which can prevent or hinder such collaboration. But these are not the only possible obstacle.

It appears that we are less cooperative with people from other groups than from our own group – we tend to be rather parochial in our willingness to work together with others. New research by experimental economist Angelo Romano at the Max Planck Institute and colleagues has investigated the issue on a large scale, in a study with over 18,000 participants from 42 diverse countries, and hence wide validity.

They used a classic two-person Prisoner’s Dilemma type game: both individuals received an initial endowment, and could freely decide how much of this they would give to their partner and how much they would keep. The amount they gave to their partner would be doubled (what they kept for themselves would not). Each participant played this game 12 times, every time with a different partner, who was chosen at random between (a) a compatriot, (b) a person randomly selected from one of 16 different countries, and (c) a person whose nationality was not revealed. In order to make decisions comparable across nations, the endowment was 10 units of a hypothetical currency (MU), equal to 2.5 minutes at the average hourly wage in the participant’s country. The strength of the cooperation was assessed through the number of MUs people sent to their partner, and then aggregated by country. While inevitably somewhat stylized and abstract, this nevertheless mimics the unconditional investment that characterizes the collaborative partnerships with strangers in the real world.

Across all 42 nations, participants were found to cooperate more if they knew their partner was from their nation, compared to when they knew that the other person was from another nation, or of unknown provenance. For all nations except Hong Kong, Nigeria and Peru, this difference was statistically significant. Moreover, parochialism barely varied across nations, despite their different levels of wealth or political stability, and when the countries were grouped according to cultural similarity, all groups exhibited significant parochialism. This does therefore indeed seem to be a phenomenon common around the world – and an important limitation to our cooperativeness.

Big Robber is watching you (or at least eyeing your earnings)

Beyond mutually beneficial cooperation, we are also capable of remarkable generosity, making sacrifices without expecting any material gain in return. We can see this around us, and it is backed up by statistics: data from 2010 suggest that 73% of the people in the UK donate money to charity and 29% volunteered time for a charity in the month prior to the survey; in Belgium the figures were 40% and 24% respectively.

Generosity is also studied through experimental games like the Dictator, the Ultimatum and the Trust game, which are variations on the same theme: one participant decides how much of an endowment to give to the other person (and how much to keep for themselves). Typically, people tend to give away between one third and half. One important limitation of such experiments, however, is that they are always between two individuals. Zurich university economist Carlos Alós-Ferrer and colleagues investigated whether people exhibit similar generosity towards groups of people. Inspired by claims of “predatory capitalism”, they established a situation in which a single participant could take a significant amount of money from a large group of participants.

Giving or taking? We do both! (image: Karolina Grabowska/Pexels)

Their Big Robber game takes advantage of the fact that, while the compensation to an individual for participating in an experiment is modest (typically around £10, €10 or $10), the overall budget for an experiment with 30-40 participants runs close to £400-500, making it possible to raise the stakes. Each session had 32 participants, equally divided into groups I and II, and consisted of three stages. First, the 16 members of group I were told that, at the end of the session, one of them would be randomly selected and have the chance to take 50%, 33%, 10% or 0% of the combined earnings of group II, with a personal gain of respectively around €100, €66, €20 or €0. They then had to decide which of those percentages they would ‘rob’ if they were chosen. Simultaneously, the members of group II (the ‘victims’) were informed about the question the members of group I were asked, and that they would be ‘robbed’ by one of them at the end of the session. In the second stage participants of both groups played successive rounds of the Dictator, Ultimatum and Trust games, providing an indication of their social preferences (and earning the victims the money that would be later partially robbed!). The final stage included a question whether participants wished to donate part of their earnings to charity (to examine possible guilt on the part of the ‘robbers’).

More than 56% of the ‘robbers’ chose to take the maximum of 50% of the other group’s earnings, while only 2% decided to take nothing. The biggest robbers were also the least generous in the games of the middle stage and donated a smaller fraction of their earnings, suggesting that social preferences are aligned (those who give the least take the most). But more importantly, the behaviour of all participants in the middle stage was well within the standard ranges reported in the literature, so nobody – not even the big robbers – was significantly more selfish than typical. Generosity towards single individuals appears to coexist very well with highly selfish behaviour when there is a larger group of victims.

The evidence around us suggests that our tendency to cooperate has led to spectacular economic and social wellbeing gains. But these two studies provide some sobering nuance. Not only do our parochialist instincts mean we leave promising opportunities for collaboration unexploited, we also have a dark side that is ready to rob as long as it is from a group and not a single person.

Good people? Yes, kinda, but, it would seem, with some scope for improvement…

About koenfucius

Wisdom or koenfusion? Maybe the difference is not that big.
This entry was posted in Behavioural economics, Economics, Ethics, Morality, Psychology, Society and tagged , , . Bookmark the permalink.

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