Crawl Across the Ocean

Tuesday, June 14, 2011

91. Another View on the Evolution of Cooperation

Note: This post is the ninety-first in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

I happened upon an interesting article the other day by Daron Acemolgu.

Acemolgu points out that researchers often use coordination models to study the level of cooperation in society because these models allow for multiple equilibria - i.e. one with cooperation, one without1

"Why do similar societies end up with different social norms, and why and how social norms sometimes change? A common approach to answering these questions is to use coordination games, which have multiple equilibria corresponding to different self-fulfilling patterns of behaviour and rationalise the divergent social norms as corresponding to these equilibria. For example, it can be an equilibrium for all agents to be generally trusting of each other over time, while it is also an equilibrium for no agent to trust anybody else in society. We can then associate the trust and no-trust equilibria with different social norms."

As he goes on to point out, this isn't a very dynamic analysis, in the sense that it doesn't answer the questions of why or how we get from one equilibrium to another.

"Simply ascribing different norms to different equilibria has several shortcomings, however. First, it provides little insight about why particular social norms and outcomes emerge in some societies and not in others. Second, it is similarly silent about why and how some societies are able to break away from a less favourable (e.g., no trust) equilibrium. Third, it also does not provide a conceptual framework for studying how leadership by some individuals can help change social norms."

I didn't spring for the $5 required to download the full paper, but from the article it seems like one mechanism posited by Acemolgu for society to move from one equilibrium to another is if a 'prominent' person influences other people with their own behaviour.

"A particularly important form of history in our analysis is the past actions of "prominent" agents who have greater visibility (for example because of their social station or status). Their actions matter for two distinct but related reasons. First, the actions of prominent agents, impact the payoffs of the other agents who directly interact with them. Second, and more importantly, because prominent agents are commonly observed, they help coordinate expectations in society. For example, following a dishonest or corrupt behaviour by a prominent agent, even future generations who are not directly affected by this behaviour become more likely to act similarly for two reasons; first, because they will be interacting with others who were directly affected by the prominent agent's behaviour and who were thus more likely to have followed suit; and second, because they will realise that others in the future will interpret their own imperfect information in light of this type of behaviour. The actions of prominent agents may thus have a contagious effect on the rest of society."

What strikes me, coming back to the discussion about coordination, is all the words we have that, in the right context, mean the same thing: coordination, cooperation, correlation, collaboration, etc. Naturally, the trick with a coordination problem is to somehow coordinate everyone's behaviour. A hierarchical structure can create a monopoly in which one entity/person controls all, thus greatly simplifying the problem of getting everyone to sing from the same songbook. When putting leviathan in charge isn't feasible or isn't desired, then it becomes trickier to get a bunch of independent actors to coordinate on a particular outcome.

The 'prominent' person is like a soft version of the leviathan - not forcing everyone to go along, merely setting a good or bad example and hoping the ripples of that behaviour are enough to 'tip' society from one equilibrium to another. I didn't read the paper so I shouldn't really comment, but the notion that something like JFK asking people what they can do for their country is going to lead to a widespread change in behaviour seems hard to swallow for me. To me it seems more likely that levels of cooperation will be driven by a combination of history (as Acemolgu acknowledges) and changes in fundamental factors like technology (e.g. the medium is the message) and the natural environment (along the lines that I discussed in my last post).

1Note: The Stag Hunt, that we discussed back here is an example of a game theory model with more than one equilibrium.

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