Economics, Literature and Scepticism

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I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.

Friday, May 09, 2008

More on Antisocial Punishment

Posted by Simon Halliday | Friday, May 09, 2008 | Category: , , , |

Subsequent to my post two days ago on the Herrmann, Thöni & Gächter paper, Simon Gächter presented some more evidence at the Faculty of Economics. Having already heard some of the stuff before I was able to think about it a bit more and to think contemplate some of the additional repercussions of the work. Moreover, because we sat there for about two hours talking about the paper and the evidence, the contributions by several individuals increased my understanding even more. Fantastic times.

Anyway, one of the things I don't think that I gave sufficient weight to previously was the way in which this evidence directly contradicts the rational actor model. To me this has become almost trivial, but in interacting with others I regularly become aware how pervasive this view still is – the view that in order for us to have coherent economic theory we cannot deviate from a rational actor model, with regular preferences that are entirely self-regarding. Individuals preferences are evidently not entirely self-regarding. There is a surfeit of evidence to show this. Moreover, that something as ephemeral as 'culture' could actually enter into the ways that individuals behave is entirely contrary to the way in which economics operates, or, I should say, assumes individual agents to operate. Thus, the evidence that I discussed which Herrmann et al. found from their experiments is rather quite exceptional. It illustrates definitively that different cultures will act differently in situations of economic cooperation.

Subsequent to these experiments Gächter undertook further experiments in Switzerland and also in Russia. Once more the evidence there was anti-social punishment in Russia and the exceptional 'punishment results in cooperation' result in Switzerland. However in this set of data the sample in each of the countries was much larger than it had been in the inter-country comparisons previously. The samples covered rural and urban, mature and young. The anti-social punishment norm was pervasive in Russia, in Switzerland it was non-existent. This is astonishing. It provides evidence, once more, that conventional models in economics, i.e. the neoclassical Arrow-Debreu-Koopmans models I mention above are entirely inadequate to describe the behaviours of agents in modern day economies. I believe too that this kind of validation was necessary in order to show that their data wasn't simply quirky. Moreover, Benedikt Herrmann in personal communications, recently told me that experiments done by a colleague of his in Africa (though I hate that generalization) have had similar and particularly strong anti-social punishment results.

Moving away from these considerations, Gächter links the phenomenon of antisocial punishment to some of the (very) recent literature on 'Do-gooder derogation' (Monin, JPSP, 2008). The kind of situation where cooperators, or 'do-gooders' are sanctioned by others because these others view their behaviour as paternalistic, condescending and 'better than thou'. I haven't read Monin's paper yet, so I cannot comment on this, but my suspicion is that this may be accurate. Furthermore, when Gächter discussed indexes from Hofstede (I think) referring to individualism vs. collectivism, it was shown that those countries in which the individualism ranking was high and the collectivist ranking was low were less likely to anti-socially punish others than those in which the individualism ranking was low and the collectivist ranking was high. I think there may be a few factors endogenous to this though, as in their data their was a fairly strong correlation between lack or rule of law and lack of civic norms with the low individualism and high collectivism indices.

It would be really interesting, imho, if we could somehow manage to control for various factors and say 'this is the marginal effect of the norm'. Don't think it's at all feasible, but it would still be interesting. Would this norm (dummy?) variable be something like the controversial 'Africa Dummy'?

More on this and other topics soon.

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