Thursday, April 26, 2018

Propagation of economic inequality through reciprocity and reputation.

Interesting work from Hackel and excerpt from their introduction, followed by their abstract:
Reciprocity and reputation are cornerstones of both evolutionary accounts of prosociality and evidence-based policy suggestions for amplifying cooperation on a large scale. For instance, people are more likely to vote, donate blood, and conserve energy when their actions are observable by others.
In studies of reciprocity, participants typically start out with an even distribution of wealth By contrast, the real world features enormous and rising economic inequality. We propose that when initial distributions of wealth are unequal, reciprocity and reputation might exacerbate economic inequality.
One possible mechanism is reward-based reinforcement learning, through which people associate actions with rewards Consider two “givers,” one of whom starts with a $100 endowment and the other of whom starts with a $20 endowment. If each giver shares half of his or her resources, each exhibits equal levels of generosity but provides differing levels of reward value, or raw capital, to beneficiaries. When people experience repeated pairings of a stimulus with reward, they are more likely to return to that stimulus . Similarly, we suggest that rewards build positive affect toward another person—even when those rewards do not reflect the giver’s generosity—and these positive associations can color later choices of people with whom to interact.
The abstract:
Reciprocity and reputation are powerful tools for encouraging cooperation on a broad scale. Here, we highlight a potential side effect of these social phenomena: exacerbating economic inequality. In two novel economic games, we manipulated the amount of money with which participants were endowed and then gave them the opportunity to share resources with others. We found that people reciprocated more toward higher-wealth givers, compared with lower-wealth givers, even when those givers were equally generous. Wealthier givers also achieved better reputations than less wealthy ones and therefore received more investments in a social marketplace. These discrepancies were well described by a formal model of reinforcement learning: Individuals who weighted monetary outcomes, rather than generosity, when learning about interlocutors also most strongly helped wealthier individuals. This work demonstrates that reciprocity and reputation—although globally increasing prosociality—can widen wealth gaps and provides a precise account of how inequality grows through social processes.

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