My latest Mind and Matter column in the Wall
Street Journal:
A new study by Dirk Helbing at ETH Zurich in
Switzerland and colleagues has modeled the emergence of “nice”
behavior in idealized human beings. It’s done by computer, using
the famous “prisoner’s dilemma” game, in which a prisoner has to
decide between cooperating with a comrade to get a mutual reward or
avoiding a punishment by being the first of the two to defect to
the other side. The Zurich team found that so long as players in
the game stay near their (modeled) parents, the birth of a nice guy
predisposed to cooperate can trigger “a cascade” of generous
acts.
In other words, more togetherness and physical proximity across
the generations allows the development of more pro-social behavior.
“The clustering of friendly agents, which promotes other-regarding
preferences, is not supported when offspring move away.” They also
argue that networking via social media can promote niceness, which
might surprise regular users of Twitter.
This is not the first work to find mathematical evidence that
there are conditions under which cooperative behavior drives out
selfish behavior. The key insight of the Zurich team is that both
nice “homo socialis” and nasty “homo economicus” (the selfish
boogeyman who supposedly reigns in classical economics) can be
promoted by evolution under particular circumstances. So long as
there is little geographic mobility, clusters of networked kin and
friends develop, putting an advantage on being nice.
Most evolutionists now accept that kindness might be just as
ancient and innate as selfishness. But it’s also clearly
conditional: People tend to cooperate with relatives and frequently
encountered acquaintances, not indiscriminately.
But does commerce promote or hinder cooperative behavior? Most
people assume it hinders, but economists have been arguing since
before Adam Smith that markets promote good behavior as people
discover the mutual advantage in exchange. “Sweet commerce,”
Montesquieu called it. A virtuous circle of voluntary cooperation
allows both the producers and consumers of, say, bread or
electricity to be better off.
As Joe Henrich of the University of British Columbia and
colleagues found in a study a few years ago, the more people in
small-scale societies are exposed to modern commerce, the more
generous they prove to be when faced with a test called the
“ultimatum game,” in which participants must offer to share part
of a windfall but lose it all if the recipient rejects the
offer.
So the notion of “Homo economicus,” schooled by capitalism to be
shortsightedly selfish, is these days something of a straw man
(“Homo stramineus”?). It is found more often being beaten up in the
literature of social science than being celebrated in
economics.
It is futile to ask whether people are naturally cooperative or
selfish. They can be either, depending on the circumstances. Dr.
Helbing cites “tragedies of the commons” where open access to a
common-pool resource such as a fishery tends to result in
overfishing that harms everybody—a sort of extended real-world
version of the prisoner’s dilemma.
Yet various economists, including the late Nobel Prize winner
Elinor Ostrom, have shown that in some cases communities can and do
come together to solve such tragedies, often finding a middle way
between nationalizing and privatizing the threatened resource.
Likewise, the bubbles and crashes that have afflicted asset
markets ever since Holland’s tulipmania in the 17th century and
right up to the subprime housing bubble are also cousins of the
prisoner’s dilemma. If people would only cooperate not to bid asset
prices above their fundamental values, then there would not be
winners and losers when prices spike and crash.
As the Nobel-winning economist Vernon Smith (now of Chapman
University) and colleagues found in laboratory experiments, markets in
goods for consumption promote cooperation, but markets in assets
for speculation and resale produce bubbles and crashes. Once again,
the difference lies in the conditions, not in the people
themselves.