Norms and Development: Interdisciplinary Approach

1. Norms and Development:Interdisciplinary Approach Week 2 Explaining Social Norms I: Evolutionary Perspective

2. A Story of Mr. RATIONAL One day, he had his wallet ($50) stolen on the street. As he is a very busy and successful businessman, it’s just a waste of time to try to get it back. He quickly estimated the cost for recovering the wallet is more than $200. He is so clever and rational, he didn't chase the thief.

3. If the thief realizes that he’s a rational person, he will be a sucker for the thief in future…

4. A Story of Mr. EMOTIONAL He is a successful businessman but known as very quick-tempered person. When he had his wallet stolen, his temper flared up and started to chase the thief. He is not calculating the cost of chasing anymore. He’s like an animal just driven by anger…

5. If the thief knows that he never gives up chasing until he gets a wallet recovered, he’ll never be a sucker for the thief.

6. Passions Within Reason by Robert H. Frank (1989) • In the world, there are many situations in which it is worse to try to be rational. • Emotion, that are considered to be a representative of human irrationality, can maximize self-interest that cannot be achieved by rational individuals…

7. Huh? Being irrational is rational? Being rational is irrational?

8. t=1 t=2 t=3 t=4 t=5 t=100 The Limit of Rationality Action Total consequences of an action = the sum of consequence at each time Consequence at time t

9. Forward vs. Backward Rationality • Rationality = maximization of self-interest • Forward Rationality = evaluation of the action before the action is taken  with practical and logical reasons, the range of maximization is myopically limited. • Backward Rationality = evaluation of the action long after the action was taken.

10. Range for backward rationality t=1 Range for forward rationality t=2 t=3 t=4 t=5 t=100 Action

11. Some Terminological Issues • The term “optimization” implicitly assumes forward rationality. • Backward rationality seems to be optimizing. But, remember that, when an agent with backward rationality takes the action that was optimum in the past, it may not be optimum anymore in future (e.g., what if the consequence of the action is evaluated at the time t = 200?).

12. Mechanisms of Backward Rationality • Genetic Evolution Successful genotypes spread in a population via Darwinian selection. • Individual Learning Trial and error increases the proportion of successful behaviors within individuals. • Social Learning Successfulbehaviors/traits spread in a population via imitation.

13. Evolutionary processes are the mechanisms acquiring the behaviors that are backwardly rational and emancipate us from the myopic forward rationality. • This is exactly the reason why we pay attention to the evolutionary processes as initial candidates explaining human behaviors that contradict with the principle of forward-rationality.

14. We do NOT argue that all the human behaviors are genetically encoded and selected by genetic evolution. • We do NOT believe in that evolutionary processes (in general) can explain everything in the world. • We are just arguing that, when we find human behaviors that look like conflicting with self-interest, it is a simple and parsimonious research strategy to check the possibility that such behaviors are the product of backward rationality.

15. Roadmap • Key issues in evolutionary processes • Report on Axelrod (1986) • What lacks in evolutionary perspective? • Discussion

16. Social Learning: Random Imitation • Let’s consider social learning. • Individuals in the population has a trait (A or B). A is more beneficial than B. • An individual (social learner) randomly picks another individual (target) and just imitate the target’s trait.

17. Random social learning does not increase an adaptive trait in a population.

18. Social Learning: Majority-Biased Imitation • Let’s consider social learning. • Individuals in the population has a trait (A or B). A is more beneficial than B. • Imagine that an individual (social learner) randomly picks three other individuals(targets).If majority of the targets has the trait X, the learner just imitates it. Otherwise, don’t imitate.

19. Majority-biased social learning just increases initially popular trait (but not an adaptive trait in this case).

20. Social Learning: Payoff-Biased Imitation • Let’s consider social learning. • Individuals in the population has a trait (A or B). A is more beneficial than B. • Imagine that an individual (social learner) randomly picks another individual (target) and imitate the target’s trait only when the benefit of the target received in the past is larger than the benefit the learners received. Otherwise, he doesn't imitate the trait.

21. Payoff-biased social learning increases the proportion of an adaptive trait.

22. Social learning is a catch-all word. Be careful when you use this word. When we say “evolution is an analogy of social learning”, it means payoff-biased social learning. • Other types of social learning and their roles are discussed next week…

23. Equilibrium and Path Dependency • As a result of evolutionary processes, a society may reach at stable states in which no one can get better outcome by changing the behaviors = evolutionarily stable equilibrium. • There may be multiple equilibriums existing. In such a case, history matters = path dependency.

24. An Example: Coordination Game • Individuals are randomly matched with another individual and play the game. • Evolutionary processes increase the proportion of adaptive strategy.

25. Very small initial difference results in totally different society. Once a society is set on a different path, it cannot escape from the self-reinforcing processes…

26. Implications of Multiple Equilibriums • Individuals with totally identical mentality or psychology may create totally different societies. • Differences between societies cannot be easily reduced into the differences in the psychological mechanisms. • Consider the article in the Guardian. Why the people, who are considered to be kind and nice, are so messy in queuing?

27. When Socially Harmful Norms Persist or Disappear: An Evolutionary Explanation Equilibrium B Equilibrium A 1. Because a society is in stable equilibrium, small perturbation cannot easily move it to another equilibrium. Stable equilibrium

28. When Socially Harmful Norms Persist or Disappear: An Evolutionary Explanation Equilibrium B Equilibrium A 1. Because a society is in stable equilibrium, small perturbation cannot easily move it to another equilibrium. Stable equilibrium

29. 2. If a norm that was socially beneficial in the past is transformed into socially harmful norm, the equilibrium may become less stable. This will enhance a society moves to another stable equilibrium. Equilibrium A Equilibrium B

30. 3. However, a society continues to stay in the same place until when accumulated perturbation creates very large shock. It is just because a harmful norm is still a stable equilibrium. Equilibrium A Equilibrium B

31. Summary • Evolutionary processes have a potential for explaining 1) seemingly irrational behaviors and 2) cultural/societal differences with the single principle of backward rationality. • Thus, evolutionary processes may save us from the tyranny of infinite numbers of cultural-specific psychological concepts… • We focus on evolutionary processes not because it can explain everything but because it is a simple and parsimonious starting point.

32. Game Theory vs. Evolutionary Game Theory? Q. Forward rationality assumed in game theory is like Laplacean-demon. Does game theory make the same prediction with evolutionary game theory that assumes backward rationality? A. Yes (but not always). Just remember that evolutionary game theory investigates the dynamic processes in which a society changes, and game theory investigates where a society reaches as a result of dynamic evolutionary processes.

33. Let’s move to Axelrod (1986) that first applied evolutionary perspective for explaining WHY social norms exist.

34. What’s Wrong About Axelrod (1986)? “The model makes the critical assumption that a player’s vengefulness against nonpunishment is the same as the player’s vengefulness against an original defection. (p. 1102, left column).”  If this linkage is removed, social norms cannot evolve.

35. PF cooperate punish free ride FF PP cooperate free ride free ride cooperate punish punish Step 1 Step 2 Step 3 • PP is better than FF as FF is punished in both steps 2 and 3. • However, PF is better off than PP at step 3. If PF dominates PP, then FF can invade and this results in the evolution of free riders at the step 1.

36. A Basic Model of Social Norm • Step 1. Norm-obedience • Step 2. Punishment of norm violators • Even if a social norm is beneficial to everyone (=functional), it cannot solve the free-rider problem.

37. What Have We Learned? Some mechanism that makes punishment (at least) less disadvantageous is necessary.

38. Why Free-Rider Problem Was Solved in Kameda et al. (2003)? • The game structure is slightly different from a standard game of social norms  the cost of punishment is very small in communal sharing norm. • Punishment results in the increase of immediate benefit  non-acquirers can get a portion of resource from an acquirer (i.e., looting). This does not happen in standard game of social norms.

39. Another solution is to stop interacting with norm-violators (Aoki, 2001). • If people live in a small group and cannot escape to the outside, like small villages in mountains, punishment is cheap as it is sufficient to break the relations (i.e., helping in danger) with norm-violators. • It doesn't work, however, if mobility gets higher or group size gets larger. It is difficult to imagine other cases (except for the above two) in which punishment is so cheap…

40. Summary and Conclusion

41. What Is Evolutionary Perspective? • This is a powerful and parsimonious perspective that can explain several (seemingly) conflicting phenomena with the single principle. • As three mechanisms composing evolutionary processes (individual/social learning and evolution) are important forces, evolutionary processes can be a kind of first-order approximation of social dynamics. See my talk at Ringberg.

42. What Lacks in Evolutionary Perspective? • However, it cannot explain the existence of punishment of norm-violators in many situations and thus insufficient for explaining social norms. • Furthermore, this approach tends to ignore psychological mechanisms underlying social norms. For instance, where's a room for (seemingly maladaptive) emotion, such as guilt/shame, that seem to be crucial for maintaining social norms?

43. Towards Cultural-Evolutionary Perspective • We tried to explain seemingly irrational behaviors only with the single principle. In the real world, however, several other forces are working. • Cultural-evolutionary perspective is the second-order approximation that provides answers to the above questions by incorporating other forces. Keep in mind that, however, this perspective hasthe strong basis on evolutionary-perspective.