cooperation

Why Is Reciprocity So Rare in Social Animals? A Protestant Appeal

One Sentence Summary:
Game theoretic explanations of the evolution of cooperation in humans and other animals relies on assumptions -- rational players should never cooperate, cooperative behavior is explained by direct or diffuse reciprocity, animals can do the mental bookkeeping necessary to reciprocate with multiple partners over time -- that are not always or often borne out by data, necessitating new conceptual tools.
Disciplines:
Biology
Cultural Evolution
Economics
Findings:
  • Partner markets, emotions, learning, reputation all strongly influence cooperation in social animals including humans, but are ignored by conventional game theory models of reciprocal altruism, indicating a need for new conceptual tools in evolutionary game theory.
  • Evolution does not design new mental tools for each problem, but modifies existing mechanisms.
Keywords:
tit-for-tat
reputation
reciprocity
prisoners dilemma
evolution
cultural evolution
cooperation
altruism
Author(s) / Editor(s):
Published in:
Genetic and Cultural Evolution of Cooperation, Peter Hammerstein, Ed., MIT Press in Cooperation with Dahlem University Press
Date:
2003
One Paragraph Summary:

Game theoretic explanations of cooperation involving tit-for-tat strategies and reciprocal altruism are not supported by a large body of evidence. Only a small number of animal examples have been found. Simple models of repeated games do not match the circumstances of evolutionary change. Partner switching and mobility counter the assumptions necessary for reciprocal altruism as a stable evolutionary mechanism. Reciprocity requires significant mental machinery – how do organisms determine whether the actions of others are intentionally or unintentionally cooperative or uncooperative? Alternative conceptual schemas such as partner markets – making it unprofitable for partners to switch – offer alternative conceptual schemas. Emotions may play a role in mediating complex interactions in which intentionality and reputation play a part.

When Push comes To Pull: The New Economy and Culture of Networking Technology

One Sentence Summary:
Information and communication technology innovation have begun to transform commercial business and social institutions from a "push" technology approach (hierarchical "center out"), to a "pull" technology approach (networked -based and decentralized). This poses new challenges to social, political, and educational systems that are largely designed to support "push" economies.
Disciplines:
Business
Law
History
Cultural Evolution
Technology
Economics
Political Science
Sociology
Findings:
  • We are living in an epochal period of transition bridging two very different types of economies and cultures. We are transitioning from a "push" economy: that tries to anticipate consumer demand, and then creates a standardized product, and "pushes the product into the market and culture, using standardized distribution channels and marketing. We are transitioning to a "pull" economy: open and flexible production platforms that use network technologies to coordinate many different entities from disparate regions.. "Pull" economies produce customized products and services that serve localized needs (demand-driven), usually in a rapid manner.
  • "Pull" networks tend to build the capabilities of their networked partners, by providing performance feedback and sharing best practices among the network participants. "Pull" platforms therefore tend to better employ the enthusiasm of all of the participants.
  • The "pull" phenomenon is not confined to business/online commerce. The spread of common use of internet technologies is finding "pull" techniques being applied in entertainment, social life, politics, education, and government.
  • "Pull" models are going to change the way that governments create policy as more companies gravitate toward them.
Keywords:
capitalism
communication
complexity
cooperation
cultural evolution
group forming networks
hierarchy
intellectual property
interdependence
networks
norms
open source
property rights
reciprocity
reputation
social capital
trust
Author(s) / Editor(s):
Published in:
The Aspen Institute
Date:
2006
One Paragraph Summary:

Over the past 25+ years, change that has usually originated with technological innovation has led to new products, services, and human behavior patterns. These changes are reflected in business and industry, and the way that people entertain, govern, educate, and socialize among themselves. The change is from a centralized, command and control, bureaucratic, broadcast way of organizing, that tries to anticipate and create demand, to a decentralized and highly networked system that shares information about overall network performance and best practices among it's network, and meets local and specialized needs.

One Page Summary:

This paper is a summary of an Aspen Institute sponsored in-depth roundtable session, written from the perspective of one informed conference observer (Bollier). The participants are leading thinkers in the many complex areas this paper covers (economics, systems theory, human behavior, human futures, information technology evolution, etc) and are listed on page 57. A selection of their key insights shared in the paper are listed below:

A "push" economy is geared towards mass production, anticipating consumer demand, and routing resources to the right place at the right time, to create standardized and mass produced products. By contrast, a "pull" economy is based on open, flexible production platforms that are used to orchestrate a broad range of resources. Instead of producing standardized products, "pull" model companies are demand-driven, and assemble products in customized ways that serve specialized or local needs, usually using "rapid" or "on the fly" processes.

Several global corporations are moving towards "pull" methods, and away from "push" models; ie., Toyota, Dell, Cisco, Li & Fung. These companies employ different variations of Value Network models, that share information about overall network performance and best practices for serving specialized needs, among hundreds or even thousands of partner companies that make up the network. This creates an intra-network knowledge commons. Some companies also work closely with Open Source Software projects, thereby expanding their "pull" network, and expanding their knowledge commons into a broader Open Commons via Open Source Software project contributions. Thus, "pull" business models also tend to be Network Value-Increasing, and Commons-based business models as well.

"Pull" models can also be platforms for creating "increasing returns dynamics." This is due to "pull" models being based around loose and flexible networks that are already configured to scale as growth occurs. So, growth does not incur the huge overhead costs in administration that "push" models must contend with. Pull platform key characteristics include modular and loosely-coupled networks, open channels that better harness the passion and commitment of innovation communities. "Pull" platforms also will tend to influence public policy with regards to education and innovation, as more companies tend to gravitate towards the "pull" models.

The areas where "push" models tend to succeed in business are in areas where people do not know what they want, and prefer to shop from pre-made selections (Ikea, Home Depot). However, there are even "pull" models to found here, in the form of user-driven innovation, such as mountain biking, extreme skiing, hot rodding, etc. In these pro-amateur niches, customers don't necessarily know what they want, but do want to be a participant in the "pull" network that creates the product.

How do you tax a product that is made in 23 different countries? "Pull" models are going to change the way that governments create policy as more companies gravitate toward them. This will influence laws about intellectual property, education, taxation and more.

"Pull" economies are not just centered around finding creative ways to "outsource/offshore jobs" away from one place and to the places where "labor" is "cheaper". Successful "pull" models have encouraged and aided "insourcing", where more jobs are created, for instance in the United States by "foreign sources (a total of 7 million cited by this paper), than are out sourced (a total of 600,000+ cited by this paper). This is because pull models seek out, not just the "cheapest" labor, but the best ways to add value to the production networks. So, they can scale to many participants around the world, regardless of local labor costs, to find the best participants needed for specific specialized productions.

The social dynamics of "pull" models are highly centered around creating relationships of trust, sharing knowledge, and close cooperation among network participants. In "pull" models, non-market value creation (tacit knowledge, intangible value) is generally steered towards a commons-based model. A commons is used as a "collective governance regime for managing shared resources sustainably and equitably." Many of these commons are made possible by networked information technologies (the internet).

Bollier suggests that "if online commons are going to be useful to business, companies will need to do more work to develop protocols for identity and reputation management". This is because the use of the commons is based around trust. It also due to the need for ways to measure qualitative value in intangible assets beyond money, like knowledge, individual performance and value multiplication, and network wide performance/value multiplication.

Roundtable participants also noted that "pull" models will pose challenges to current education regimes that are centered around training people to participate in "push" economies. One of the participants mentions that " Computers, software tools, and Internet resources make possible some radically new styles of learning. By using pull-based systems, students can function much like businesses in the pull environment: They can access resources they don't control and put themselves into flows of activity, rather than just building inventories of static, objectified "knowledge."

Towards Realistic Models for Evolution of Cooperation

One Sentence Summary:
The five major approaches to answering how cooperation emerges and becomes stable in nature (Group Selection, Kinship Theory, Direct Reciprocity, Indirect Reciprocity, and Social Learning) might be improved by not presuming asexual and non-overlapping generations, simultaneous-play for every interaction, dyadic interactions, mostly predetermined and mistake-free behavior, discrete actions (cooperate or defect), and the trivial role of social structure and social learning of individuals.
Disciplines:
Biology
Cultural Evolution
Sociology
Findings:
  • Observer-based reciprocity relaxes the requirement that each individual's likelihood of cooperating be known globally by introducing randomly selected observers. Even though interactions are only visible to these observers cooperation can still evolve showing "that cooperation may evolve through indirect reciprocity with or without global knowledge about agents' image scores."
  • Darwin's notion of the "survival of the fittest" does not specify what "fittest" refers to, and for good reason: the outcome of a behavior in each contingent situation determines its fitness. Different interpretations of "fittest" lead to different models for how natural selection works and therefore offer different explanations for the evolution of cooperation.
Keywords:
trust
reputation
reciprocity
evolution
cultural evolution
cooperation
competition
bioeconomy
altruism
agent-based model
Author(s) / Editor(s):
Published in:
MIT LCS Memorandum
Date:
2002
One Paragraph Summary:

Sociological and biological observations of humans and animals show that cooperation is an inherent part of human life and the life of many animals. This poses two questions: how do cooperative strategies become stable within evolution? And, how does cooperation emerge initially? Even though researchers have tried to answer these questions for at least a century, existing models do not fully explain why cooperation evolves. There are five major approaches: Group Selection, Kinship Theory, Direct Reciprocity, Indirect Reciprocity, and Social Learning. Each of these models explain only a few aspects of cooperation and might be improved by dropping some unrealistic assumptions: asexual and non-overlapping generations, simultaneous-play for every interaction, dyadic interactions, mostly predetermined and mistake-free behavior, discrete actions (cooperate or defect), and the trivial role of social structure and social learning of individuals.

Theories of International Regimes

One Sentence Summary:
The three schools of thought regarding international cooperation [regimes] – interest-based theories, power-based theories, and knowledge-based theories – provide numerous insights from which it is possible to draw some general findings about cooperation.
Disciplines:
Political Science
Findings:
  • Possibilities for cooperation are often enhanced by the presence of someone who takes an active leadership role. Structural leaders v. intellectual leaders v. charismatic leaders, etc.
  • The likelihood of cooperative outcomes for the four problem-structural scenarios: “conflict over values” : very low, “conflict over means” : medium, “conflict over relative gains” : low, “conflict over absolute gains” : high.
  • Institutions matter, but for different reasons.
  • Cooperation on easier issues can ease cooperation in more difficult issues.
  • Costs of monitoring and insuring compliance are lower when arrangements are self-enforcing.
  • Conflict over means when goals are agreed upon is easier to solve than conflict over the goals themselves. Cooperatively reaching an agreed upon solution is easier than agreeing on the solution in the first place.
  • Cooperation is easier in situations where relative gains are less of a concern.
  • Uncertainty over the impacts of not cooperating, as well as exogenous shocks, both increase the likelihood of cooperation.
  • Powerful players (hegemons) can promote cooperation by bearing costs.
  • Knowledge and beliefs that affect players calculations of costs and benefits can increase the likelihood of cooperation.
  • Group norms that shape the definition of “rational” behavior also influence cooperation.
  • Institutions assist cooperation by embedding and sharing knowledge and norms.
Keywords:
cooperation
Published in:
Cambridge University Press
Date:
1997
One Paragraph Summary:

The three schools of thought regarding international cooperation [regimes] – interest-based theories, power-based theories, and knowledge-based theories – provide numerous insights from which it is possible to draw some general findings about cooperation. The basic question the authors examine is how different schools of thought analyze and explain “What accounts for the instances of rule-based cooperation in the international system?” Realism argues that cooperation is primarily imposed by the powerful, sometimes through institutions, and is primarily rational utility-maximization based on relative gains concerns. Neo-liberalism asserts that cooperation is a function of rational interests, but that institutions help players to define areas of absolute gains, or common interests. Cognitivism, or the “sociological turn,” argues that knowledge and institutions combine to create shared understandings of roles and identities that shape behavior and hinder or promote cooperation.

One Page Summary:

The three schools of thought regarding international cooperation [regimes] - interest-based theories, power-based theories, and knowledge-based theories - provide numerous insights from which it is possible to draw some general findings about cooperation. The basic question the authors examine is how different schools of thought analyze and explain "What accounts for the instances of rule-based cooperation in the international system?"

The following table is presented by the authors (p6):

  Realism Neoliberalism Cognitivism
Central Variable Power Interests Knowledge
Institutionalism Weak Medium Strong
Meta-theoretical Orientation Rational Rational Sociological
Behavioral Model Relative Gains Absolute Gains Roles

A regime exists whenever agents cooperate. Formally a regime is the "implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge." Regimes can be both formal and informal, and can include institutions as well as organizations.

Interest-based Theory

Interest-based theories of cooperation focus on the ability of self-interested rational agents to overcome collective action dilemmas, i.e. situations where cooperation avoids suboptimal outcomes for the cooperators. Agents are considered to be rational utility-maximizers with given preferences. Attention is given to the role of regimes/institutions in shaping preferences and facilitating cooperation.

Interest-based theories note the spillover effects of cooperation (functionalism). Because of the costs of creating and maintaining institutions, establishing cooperation in one issue-area can result in solutions that can then be reused in other issue-areas. Cooperation is a result of institutional bargaining (contractualism) and results in negotiated agreements and commitments. Compliance with or defection from negotiated contractual agreements has reputational effects.

There are two primary approaches to interest-based cooperation:

  • situation-structural - focuses on the game-theoretic properties of the problem.
  • problem-structural - focuses on the issue-area, or topic, of the problem.

Situation-Structural: The situation-structural approach involves "interpreting different kinds of regimes as collective responses to the functional requirements of different kinds of collective action problems" (p 45). Models from game theory - such as Prisoner’s Dilemma, Coordination Game, and Assurance Game - are commonly used. Collaboration requires sanctions and compliance, whereas coordination merely requires agreement. Coordination - such as deciding which side of the road to drive on or allocating the frequency spectrum - is self-enforcing because participants have no incentive to defect. Also, various games have different "second order" dilemmas regarding costs of implementation and enforcement: collaboration is the most costly and the Assurance Game is the least costly.

Problem-Structural: The problem-structural approach involves observing the nature of the issue-area of the problem. In this analysis there are two modes of conflict with different likelihoods of cooperation in each:

  • Dissensual conflict
    • Conflict about means: when goals are agreed upon but methods are not. The possibility of cooperation is medium.
    • Conflict about values: when parties desire different outcomes. The possibility of cooperation is low.
  • Consensual conflict
    • Relative gains: when your benefit is relative to the benefits of others. The possibility of cooperation is low.
    • Absolute gains: when everyone benefits from a solution. The possibility of cooperation is high.

Some factors can aid in the possibility of cooperation. When agents operate under a "veil of uncertainty" regarding benefits and costs, they will often cooperate more readily because there are no known distributive issues to argue over. Exogenous shocks and public crises/outcry can spur cooperation on an issue. The key factor is that the issue-area regarding a given problem must be amenable to a contractual solution in the first place.

Power-based Theories

Power-based theories of cooperation focus on the importance of relative gains and security concerns to otherwise rational agents. The distribution of power and the presence of anarchy (the absence of an authority to enforce contractual obligations) are paramount. Because these concerns never change and are external to the agents involved, power-based theories are predominantly static and positivist.

There are three power-based theories of international cooperation:

  • Hegemonic Stability Theory
  • Power-based Research Programme
  • Realist Theory of Cooperation

Hegemonic Stability Theory

A hegemon is a powerful agent who provides public goods because it has the self-interest and the capacity to supply them. This provision generates free riders. According to hegemonic theory the weak exploit the strong. Hegemony can be coercive (imperialist) or benevolent (leadership).

Hegemons are necessary to shoulder the costs of rulemaking and enforcement (second-order cooperation dilemmas). In return, they generally set the rules and others adjust. Mancur Olson and Duncan Snidal have noted that small groups can provide public goods by cooperating and sharing costs, instead of relying on a single hegemon. In addition, hegemons can vary according to issue-area (the environment, nuclear weapons, etc.)

Power-based Research Programme

According to power-based theories cooperation does not result in mutual adjustment at all but instead requires the less powerful to adjust to the more powerful. In addition, power differences shape the following:

  • Who gets to play the game?
  • What are the rules?
  • What are the payoffs?

Power-based analysis suggests that the Prisoner’s Dilemma is not the best game by which to study cooperation when power is a factor. In the Prisoner’s Dilemma there is one "best" solution and the challenge is for the various agents to arrive at it. By contrast, in Battle of the Sexes, the optimal outcome is different for each player, thus there is fundamental disagreement over what constitutes the "best" solution (mathematically there is no one best solution).

As a result, cooperation and institutions merely serve the interests of the powerful. Powerful players extend their power through these means. Because differences in the distribution of costs and benefits always exist, even under conditions of absolute gains not everyone gains equally. Oran Young has questioned the reliability of assuming that structural power is translatable into bargaining power regarding outcomes.

Realist Theory of Cooperation

The Realist theory of cooperation attempts to explain cooperation given states’ overwhelming concern with security, independence, and autonomy. It is not merely relative gains that are a concern but a systemic intolerance for relative losses. All acts could result in the destruction of the agent, so power asymmetries trump all other concerns. In this scenario, absolute gains just do not exist. There is always the concern over "who will gain more?" The result is "defensive positionalism," or reluctant cooperation, wherein agents will cooperate only if they feel it is absolutely necessary. Rationality, in this case, is constrained by fear of destruction and the presence of anarchy.

For Realists, institutions matter but only because they facilitate the necessary stabilizing exertion of power: payoffs to other agents, sanctions, and norms of reciprocity (that make accepting relative gains losses in the now or on a particular issue easier in expectation of compensation on other issues or in the future). With power, cooperation is rare at best, but without power it is impossible.

Knowledge-based Theories

Interest-based theories of cooperation focus on the ability of self-interested rational agents to overcome collective action dilemmas, i.e. situations where cooperation avoids suboptimal outcomes for the cooperators. Agents are considered to be rational utility-maximizers with given preferences. Attention is given to the role of regimes/institutions in shaping preferences and facilitating cooperation.

Knowledge-based theories (cognitivism) focus on the way in which knowledge - and in particular inter-subjectively shared knowledge and beliefs - shape agents’ behavior and identities. Norms are of major interest to knowledge-based theories.

There are two cognitivist variants:

  • "Weak cognitivism" is concerned with the origins of rational actors’ behavior.
  • "Strong cognitivism" is concerned with the origins of actors’ understandings of Self and Other.

Weak Cognitivism

Weak cognitivism assumes rational actors but instead of taking preferences as given, problematizes preferences and investigates the origins of agents’ interests, as well as the impact of norms on preference formation.

Weak cognitivism sees itself as complementary to other approaches. The role of knowledge is central, including ideas and learning. Because knowledge is filtered by interpretation, preferences become fluid as knowledge changes. Because knowledge is primary, knowledge-shapers are powerful influences. Epistemic communities inform policy-makers about currently accepted shared understandings, from intersubjectively held ideas to problem definitions and concerns.

Thus the idea landscape acts as a "road map" from which agents choose their routes. Learning is possible and subsequent course-correction as well. Furthermore, the institutionalization of knowledge shapes agents’ preferences. Institutions contribute to consensus through knowledge and information sharing.

Strong Cognitivism

Strong cognitivism, on the other hand, dispenses with rational actors in favor of a sociological model of behavior. Agent’s perceptions of their own and others’ identities and roles are central objects of study. Agents are role-players, not utility maximizers.

Strong cognitivism positions itself as an alternative to other approaches. This "sociological turn" investigates how knowledge and beliefs constitute agents and make possible both power and cooperation. Agents’ very identities exist only by virtue of shared understandings. Groups and institutions define who we are and what behaviors are possible and meaningful. Strong cognitivism stands in opposition to atomistic and positivist attempts to understand cooperation.

Because there is no behavior without prior socialization, strong cognitivism suggests that agents act according to a "logic of appropriateness" rather than a utilitarian "logic of consequences."

For strong cognitivists, sanctions and cost/benefit analysis, i.e. self-interest, is insufficient to explain cooperation. Norms both regulate behavior as well as constitute agent’s identities. This means that norms constrain but also affix meaning to certain actions. An example is a game of chess, wherein the rules must be coherent and accepted before any meaningful moves can be made. As a result, compliance is not the only indicator of cooperation. Strong cognitivists also point to the justifications used by a defecting agent as well as the response of other agents when rules and norms are violated. Generalized norms of cooperation and reciprocity create a web of meaning within which behaviors are contextualized, interpreted, and evaluated.

There are four schools of thought regarding cooperation:

  • The power of legitimacy - studies the society of states and its rules.
  • The power of arguments - studies communicative rationality.
  • The power of identity - studies role-specific understandings of self and other.
  • The power of history - studies stabilizing v. critiquing the ‘world order.’

For strong cognitivists, neither human agency nor social structures should be given ontological priority; they share a "codetermined irreducibility."

The power of legitimacy

  • States comply with rules seen as legitimate even when it seems not to be in their self-interest.
  • For agents in a system, insuring the validity and stability of the system is the first priority.
  • Reputation and trust among stakeholders maintain the system.

The power of arguments

  • Understanding discourse is essential to understanding cooperation.
  • "Strategic action" attempts to control others, whereas "communicative action" attempts to convince them.
  • Common understandings are necessary to agree on goals.
  • Common understandings provide starting points for discussion.

The power of identity

  • Constructivism is the study of socially constructed identities in political science.
  • Understanding cooperation among egoists is insufficient to understanding cooperation in general.
  • The evolution of cooperation leads to evolution of community.
  • Diffuse reciprocity creates cooperation and cost-sharing without direct incentives.
  • Cooperation is self-stabilizing when agents who cooperate for selfish interests come to identify themselves as "cooperators."
  • Neither social structures nor social identities exist independent of interaction and reproduction (practices).

The power of history

  • The current world order is a product of western history and ideology.
  • Identities and norms are constructed, but by powerful elites and historical forces.
  • These forces are responsible for the dissemination and control of ideas.
  • Certain societal actors benefit from prevailing modes of production, accumulation, and dominance.
  • ‘Hegemony’ is a set of ideas promulgated by a powerful hegemon in the interest of various elites.
  • Cooperation is really collusion designed to reinforce or stabilize the existing world order.
  • Elites must compromise to maintain consensus and the stability of the world order.
  • Stability requires the marginalization of any radical conceptualizations or alternatives.
  • Seeming alternatives take "the existing order as given, as something to be made to work more smoothly, not as something to be criticized and changed."
  • Knowledge is always an ideology that works in favor of some groups and not others.

Conclusion

Cooperation is problematic. Whether cooperation is desirable or not, and why, as well as how it can be promoted or prevented depend on various assumption about the nature of agents and their interactions. Nonetheless, it is possible to uncover the processes that foster cooperation within each school of thought.

The Toyota Group and the Aisin Fire

One Sentence Summary:
A flexible and coordinated response by the Toyota Group's supplier network enabled the manufacturer to rapidly restore production after a disastrous fire; the self-organized cooperation was enabled by deliberately designed practices that created dense social networks of trust and reciprocity that extended beyond Toyota's boundaries and into the companies of its network of suppliers.
Disciplines:
Business
Economics
Findings:
  • Carefully cultivated networks of trust in business networks such as networks of suppliers to a manufacturer, can lead to rapid and flexible responsiveness of the whole network in the case of disaster that threatens their common interests.
  • The kind of social capital (networks of trust, norms of reciprocity, dense social networks of horizontal associations) noted by Putnam's study of civic institutions in Italy seem to play an important parallel role in Toyota's famously resilient and effective supply and production system – extending beyond the walls of the Toyota group to include ties with and among external suppliers.
Keywords:
social capital
networks
cooperation
capitalism
Published in:
Harvard Business Review, Vol 40, No. 1, pp 49-59, Reprint 4014
Date:
Fall 1998
One Paragraph Summary:

Toyota Group's production system and the management practices that brought it about are legendary. When the factory that supplied a crucial component burned down in 1997, the supplier network's self-organized problem-solving made it possible to begin production of the component within two days. The coordinated and rapid response did not happen in a vacuum. Toyota did not treat suppliers as a market, pitting them against one another, and demanding price improvements when suppliers improved their own productivity; instead, Toyota brought suppliers together in informal associations, at Toyota's expense, and helped them improve productivity while allowing them to keep profits as a result of improvements – even encouraging suppliers to share their improvements with others in the network. The horizontal associations, scale-free social networks, ties of trust and reciprocity that were cultivated by these and other practices (such as encouraging ad-hoc problem-solving at all levels of the company, and bringing together employees from different parts of the company into temporary juries to solve problems) created communication channels and both catalyzed and lubricated information sharing and coordinated actions.

The Quest for Meaning in Public Choice

One Sentence Summary:
Frameworks, composed of theories that are in turn composed of varying models need to be developed to study and make predictions about the complex behaviors that take place in social situations.
Disciplines:
Economics
Sociology
Psychology
Findings:
  • With incomplete information and information-processing capabilities, individuals competing for common-pool resources may make mistakes in choosing strategies designed to realize a set of goals.
  • Communication and sanctioning mechanisms among potentially competing members of a community competing for common-pool resources increases the efficiency and stability of resource exploitation.
  • A shared culture—generally accepted norms of behavior, common understanding, homogeneity of preferences and resources—improves the probability that a community will develop adequate rules and norms to govern the use of resources.
  • The transmission of culture, rules, and norms through information, knowledge, and skills across generations is a challenge for the stability of open, democratic, self-governing societies over time.
Keywords:
civil society
communication
competition
cooperation
game theory
group forming networks
property rights
public goods
sharing economy
Author(s) / Editor(s):
Published in:
American Journal of Economics and Sociology, vol. 63, issue 1, pages 105-147
Date:
January 2004
One Paragraph Summary:

A useful Institutional Analysis and Development (IAD) framework has evolved under the leadership of the Ostroms and their colleagues at Indiana University for over two decades. It has been applied with success in laboratory experiments on social behavior and in field studies and has enabled the creation of useful models with predictive value in diverse situations. Some results from the application of the IAD framework have lead to suggestions for effective use of common resources and norms for community decision making. The importance of effective communication and sanctioning mechanisms in effective community governance has become clear from the use of the framework.

One Page Summary:

The Institutional Analysis and Development (IAD) framework developed by the Ostroms and their colleagues at Indiana University provides a foundation for studying a multitude of theories, models, and predictions of public choice behaviors in different systems of governance and organization.

Frameworks define the action arena to which it would be applied; the resulting patterns of interactions and outcomes, and the means of evaluating those outcomes.

A framework is a general language about how varying rules, physical and material conditions, and attributes of a community affect the structure of action arenas, the incentives for actors, and resulting outcomes.

Action arenas include an action situation and the actors in that situation.

An action situation includes:

  • Participants
  • Positions
  • Outcomes
  • Action-outcome linkages
  • Control that participants exercise
  • Information
  • Cost and benefits of outcomes

Actors (individual or corporate) involve:

  • Resources brought to the situation
  • Values assigned to states of the world
  • Methods for dealing with knowledge and information
  • Selection processes for courses of action

Analysts can make strong predictions in tightly constrained situations of complete information: overuse of resources in an open commons where the actors do not share access to collective choice arenas.

Results are not as clear in situations where actors are embedded in communities with norms of fairness and conservation as well as the ability to communicate with each other.

Evaluation criteria can include a range of values for categories such as the following:

  • Economic efficiency
  • Fiscal equity among actors
  • Redistributional equity (e.g., policies to care for poorer individuals
  • Accountability
  • Conformance to a general morality
  • Adaptability to change

The IAD framework has been applied to various domains to make predictions of resulting behaviors in field settings. Examples of successful application include:

  • Police services
  • Urban public services in general
  • Common-pool resources: these were studied in laboratory as well as field settings. The IAD framework was used to create a theory of behavior. Communication of participants affects behavior: if no communication was permitted, the results approximated that of non-cooperative game theory. Communication led to different, more positive, results.
  • The IAD framework was used to develop extensive databases coding common-pool resources and diverse property regimes.

The Origins of Virtue: Human Instincts and the Evolution of Cooperation

One Sentence Summary:
Human emotions, customs, and institutions enable us to compete effectively with all other species by making cooperative social arrangements among ourselves – a capability that co-evolved with thumbs, speech, and tool-building.
Disciplines:
Biology
Anthropology
Cultural Evolution
Findings:
  • Hunger drove our forebears to coordinate their actions to bring down animals so large that all the meat couldn't be consumed before it spoiled. In those circumstances, everyone in the group was free to eat — even those who didn't take the risk of hunting. The meat wouldn't be available in the first place unless a few people tackled large creatures, but the benefit of the cooperative activity of a few extended even to those who had not participated in the hunt. Ridley wrote, "Big game hunting became the first public good."
  • Altruism is "an investment in a stock called trustworthiness that later pays handsome dividends in others' generosity."
  • Moral sentiments and the emotions that accompany them help enable people to cooperate and to punish those who don't.
Keywords:
cooperation
altruism
emotion
cultural evolution
Author(s) / Editor(s):
Published in:
Penguin Books
Date:
1998
One Paragraph Summary:

Ridley asks why there is so much cooperation about if life is a competitive struggle, and why, in particular are humans such eager cooperators, and traces the evolution of cooperative arrangements for mutual benefit back to the origins of cellular life, the emergence of humans as social animals. Reciprocal altruism and group selection are offered as biological explanatory mechanisms, and the role of moralistic punishment in controlling free-riders links psychological, moral, and economic dimensions of cooperation. Human physiological and cultural capabilities for inventing and exploiting social exchanges – a willingness to cooperate and to punish those who don't, reputational mechanisms for increasing trust, moral sentiments that act as a kind of social glue – are key to the success of our species.

The Logic of Collective Action: Public Goods and the Theory of Groups

One Sentence Summary:
Rational, self-interested individuals in large groups need a positive incentive or negative sanction delivered through institutional arrangements in order to provide themselves a collective good; in small groups the collective good itself can be incentive enough for individuals to cooperate.
Disciplines:
Economics
Political Science
Sociology
Findings:
  • Findings from studies of small groups cannot be scaled to predict behavior of large groups; the behavior of large groups is qualitatively different.
  • Business interests are successful in organizing toward a political common good because industries often contain a relatively small number of large firms. These firms benefit from the advantages of small groups more than large numbers of workers or consumers.
  • Many non-economic incentives play an important role in motivating cooperation, including prestige, respect, friendship or other social pressures. This is especially the case in small groups characterized by face-to-face contact.
Keywords:
cooperation
group forming networks
norms
public goods
Author(s) / Editor(s):
Published in:
Harvard University Press
Date:
1965
One Paragraph Summary:

Common or public goods are those which if consumed by one member of a group, cannot be feasibly withheld from other members. Large groups require some kind of selective sanction or incentive apart from the benefit of the public good itself for individuals to contribute their own time and resources to maintaining a formal organization. The selective aspect of sanctions or incentives indicates that institutions recognize and treat differently those who do not contribute to the public good. Organizations frequently fail to provide public goods on the most optimal scale, because all self-interested individuals try to sacrifice as little of themselves as possible to still gain access to the good. Because groups cannot benefit from fractional quantities of regulating organizations, there is also a necessary minimal cost of maintenance associated with the formation of formal organizations.

The Human Web: A Bird's-eye View of World History

One Sentence Summary:
This synthesis of world history from the days of isolated hunter-gatherer communities to the present electronically connected cosmopolitan, interconnected world shows that all of humanity today lives in a "unitary maelstrom of cooperation and competition," and that the global spread of ideas, information, and experience "constitute[s] the overarching structure of human history."
Disciplines:
History
Findings:
  • Throughout their history, humans used symbols to create webs that communicated agreed upon meanings and so, as time went by, sustained cooperation and conflict among larger and larger groups of people. Inventions that enlarged individual and collective wealth and power spread through these webs, often inequitably and with unintended consequences to the shared environment.
  • Communication technologies, including the invention of alphabetic writing, moveable type, and the electronic media from the telegraph to the telephone, radio, television, and networked personal computer have increased the unification of the world into a cosmopolitan web of competition and cooperation. The velocity of diffusion of both good and bad technologies has increased to the point that it is almost instantaneous.
Keywords:
interdependence
cultural evolution
cooperation
competition
communication
civil society
Published in:
W.W. Norton, New York
Date:
2003
One Paragraph Summary:

The spread of ideas, information, and experience in ever tightening webs of interaction describes the history of the world. The inventions of bureaucratic government (to enforce defense against competing groups); alphabetic writing (to communicate at distances greater than a village or metropolis through the use of symbols); and "portable, congregational, non-local religions"(to assuage the inequalities created by the development of more complex societies by offering the promise of a better life in the hereafter and a moral code for peoples more loosely connected than they would have been in smaller, isolated villages) resulted in the creation of metropolitan webs in the earliest civilizations in Southwest Asia and Egypt, China, and what has become India and Pakistan. Connections of separate webs by traders lead to innovation diffusion, albeit at a slower pace. Disease and economic connections also resulted from these inter-web connections. Later elaborations of these developments over millennia thickened the webs of communication and increased the velocity of information leading to the rapid diffusion of innovation: while agriculture was invented in several isolated places, the steam engine only had to be developed once. The current cosmopolitan web of cooperation and competition was accelerated by the exploitation of inventions like large ships and navigation systems, moveable type, the exploitation of energy from fossil fuels, the scientific method and its association with technology developments, and more recently, electronic communication. The complexity of society has increased along with social inequalities at the same time that cheap information technologies make those inequalities evident to all creating a “combustible mix.”

The Evolution of Cooperation

One Sentence Summary:
"The objective of this enterprise is to develop a theory of cooperation that can be used to discover what is necessary for cooperation to emerge."
Disciplines:
Political Science
Sociology
Findings:
  • The emergence of cooperation can be seen as a consequence of agents pursuing their own interests. It is not necessary to assume that those agents are more honest, more generous, or more cooperative per se.
  • What makes it possible for cooperation to emerge is the fact that the agents might interact again. The choice made now of whether or not to cooperate will affect choices made in later interactions. This called the 'shadow of the future.' The shadow of the future can exist even when the participants are unaware of it, as is the case in biological cooperation (symbiosis).
  • No best rule exists independently of the strategy being used by others. Despite this fact, robust strategies, useful in many contexts, are possible.
  • The evolution of cooperation requires high levels of reciprocal interactions between agents. The absolute number of agents can be small as long as their interactions are numerous.
  • Communities of cooperation, once established, can protect themselves from 'invasion' by less cooperative strategies. "The gear wheels of social evolution have a ratchet."
  • The winning tit-for-tat strategy:
    1. Don't be envious. Don't compare your success to others, only to your own strategic possibilities, i.e. are you employing the best strategy you have?
    2. Don't be the first to defect. Cooperate as long as others are cooperating.
    3. Reciprocate both cooperation and defection. Enforcing the rules is as important as playing by them.
    4. Be transparent. In order for others to coordinate their choices with yours, they have to understand your behavior. Keep it simple and out in the open.
  • Ways to promote cooperation:
    1. Enlarge the shadow of the future. Increase the permanence of cooperative choices or the frequency of interactions.
    2. Change the payoffs. Make the long-term incentives to cooperate greater than the short-term incentives to defect.
    3. Socialize reciprocal cooperation as a norm. Teach people to cooperate first.
    4. Improve collective memory. Collective memory, or culture, is embedded in institutions. Provide access to collective memory.
  • The foundation of cooperation is the durability of the relationship, which allows agents to learn about each other in order to cooperate.
Keywords:
assurance game
agent-based model
communication
cooperation
norms
prisoners dilemma
reciprocity
reputation
security
tit-for-tat
trust
Author(s) / Editor(s):
Published in:
Basic Books
Date:
August 1, 1985
One Paragraph Summary:

Why do people (or other actors) cooperate? "The objective of this enterprise is to develop a theory of cooperation that can be used to discover what is necessary for cooperation to emerge." It uses the Prisoner's Dilemma as a framework for testing theories about balancing self-interest and competition.

One Page Summary:

Chapter 1, The Problem of Cooperation. Why do people (or other actors) cooperate? "The objective of this enterprise is to develop a theory of cooperation that can be used to discover what is necessary for cooperation to emerge." It uses the Prisoner's Dilemma as a framework for testing theories about balancing self-interest and competition.

"In the Prisoners' Dilemma, the strategy that works best depends directly on what strategy the other player is using and, in particular, on whether this strategy leaves room for the development of mutual cooperation."

Chapter 2, TIT FOR TAT. "The iterated Prisoners' Dilemma has become the E. Coli of social psychology," yet people have not paid much attention to how to play the game well. Axelrod organized a computer tournament to which people familiar with PD submitted programs encoding different strategies. The winner was one of the simplest, TIT FOR TAT.

Axelrod then constructed an environment in which different programs competed, and the losing programs were eliminated: this was an ecology that rewarded high scoring programs, and punished others. "This process simulates survival of the fittest. A rule that is successful on average with the current distribution of rules in the population will become an even larger proportion of the environment of the other rules in the next generation. At first, a rule that is successful with all sorts of rules will proliferate, but later as the unsuccessful rules disappear, success requires good performance with other successful rules." In other words, the competition gets tougher.

"The analysis of the tournament results indicate that there is a lot to be learned about coping in an environment of mutual power. Even expert strategists from political science, sociology, economics, psychology, and mathematics made the systematic errors of being too competitive for their own good, not being forgiving enough, and being too pessimistic about the responsiveness of the other side."

The tournaments reveal that "there is a single property which distinguishes the relatively high-scoring entries from the relatively low-scoring entries. This is the property of being nice, which is to say never being the first to defect."

TIT FOR TAT's rules for success:

  • Be nice. Don't be the first to go on the attack. This demonstrates good will, and avoids provoking others.
  • Retaliate. If others attack, retaliate. Not doing so encourages bad behavior and gives niceness a bad reputation.
  • Be forgiving. If others defect but then go back to cooperating, accept the opportunity to move back to a cooperative mode.
  • Be clear. Others can predict what you'll do, be certain that their moves will have definite outcomes. "There is an important contrast between a zero-sum game like chess and a non-zero-sum game like the iterated PD. In chess, it is useful to keep the other player guessing about your intentions. The more the other player is in doubt, the less efficient will be his or her strategy. But in a non-zero-sum setting it does not always pay to be so clever. In the iterate PD, you benefit from the other player's cooperation."

Chapter 4, Trench Warfare. During World War I, "live and let live" arrangements emerged spontaneously between opposing units on the Western Front. Cooperation could take hold because "the same small units faced each other in immobile sectors for extended periods of time." Consequently, they had a more sustained relationship than in mobile warfare, and could develop commonly-understood rules, reciprocity and restraint in attacks, displays of strength (e.g., snipers shooting at hard targets)as well as ethics (recognition that there was an arrangement and violating it was immoral) and rituals (e.g., regular artillery firing).

"Cooperation first emerged spontaneously in a variety of contexts, such as restraint in attacking the distribution of enemy rations, a pause during the first Christmas in the trenches, and a slow resumption of fighting after bad weather made sustained combat almost impossible. These restraints quickly evolved into clear patterns of mutually understood behavior, such as two-for-one or three-for-one retaliation for actions that were taken to be unacceptable."

Chapter 6, How to Choose Effectively. Four suggestions about how to do well in PD:

  • Don't be envious. In a PD, "envy is self-destructive. Asking how well you are doing compared to how well the other player is doing is not a good standard unless your goal is to destroy the other player." However, in an iterated prisoner's dilemma, you can't do better than the other player, unless they're always suckers. "In a non-zero-sum world you do not have to do better than the other player to do well for yourself. The other's success is virtually a prerequisite of your doing well for yourself."
  • Don't be the first to defect (be nice). "It pays to cooperate as long as the other player is cooperating." In a short game, defection can make sense; but in a relationship, taking advantage of the other person is self-defeating.
  • Reciprocate both cooperation and defection. TIT FOR TAT "does not destroy the basis of its own success. On the contrary, it thrives on interactions with other successful rules." However, the right level of forgiveness depends on the context, and the other players' strategies.
  • Don't be too clever. "In a zero-sum game, such as chess it pays for us to be as sophisticated and as complex in our analysis as we can. Non-zero-sum games are not like this. The other player can respond to your own choices. And unlike the chess opponent, the other player in a PD should not be regarded as someone who is out to defeat you." "There is an important contrast between a zero-sum game like chess and a non-zero-sum game like the iterated PD. In chess, it is useful to keep the other player guessing about your intentions. The more the other player is in doubt, the less efficient will be his or her strategy. But in a non-zero-sum setting it does not always pay to be so clever. In the iterate PD, you benefit from the other player's cooperation."

Chapter 7, How to Promote Cooperation. Promoting cooperation can be thought of as an exercise in tinkering with the variables in a PD. "As long as the interaction is not iterated, cooperation is very difficult. That is why an important way to promote cooperation is to arrange that the same two individuals will meet each other again, be able to recognize each other from the past, and to recall how the other has behaved until now."

  • Enlarge the shadow of the future. For cooperation to emerge, players must be in a continuing relationship, with the expectation that it will continue in the future. "Mutual cooperation can be stable if the future is sufficiently important relative to the past." "There are two basic ways of doing this: by making the interactions more durable, and by making them more frequent. [P]rolonged interaction allows patterns of cooperation which are based on reciprocity to be worth trying and allows them to become established," Making interactions more frequent makes "the next interaction occur sooner, and hence the next move looms larger than it otherwise would." You might do this by enforcing isolation, or constructing hierarchies or organizations, which are "especially effective at concentrating the interactions between specific individuals."
  • Change the payoffs. Make defection less attractive, by enforcing laws, or growing the value of long-term incentives.
  • Teach people to care about each other.
  • Teach reciprocity. Reciprocity "actually helps not only oneself, but others as well. It helps others by making it hard for exploitative strategies to survive."
  • Improve recognition abilities. "The ability to recognize the other player from past interactions, and to remember the relevant features of those interactions, is necessary to sustain cooperation. Without these abilities, a player could not use any form of reciprocity and hence could not encourage the other to cooperate."

Chapter 8, The Social Structure of Cooperation.
The social structure of cooperation involves labels, reputation, regulation, and territoriality.

  • Labels are fixed characteristics of an agent that are observable by other agents. Labels affect reciprocity and retaliation via assumptions of group similarity and stereotypes.
  • Reputation is others' belief about the strategies an agent will employ. Reputation may be based on past behavior or on rumours, i.e. reputation can be accurate or merely believed. Reputation affects whether or not other agents will cooperate or defect with you.
  • Regulation involves setting the stringency of a standard of behavior "high enough to get most of the social benefits of regulation, and not so high as to prevent the evolution of a stable pattern of voluntary compliance from almost all of the companies" (or regulated agents).
  • Territoriality refers to both physical and conceptual spaces that can be 'invaded' by agents of differing strategies. Territoriality establishes boundaries within which behaviors will be reinforced or retaliated against depending on prevailing norms. Also, the boundary provides an 'inside' for agents that comply with the norms, and an 'outside' to which they can be expelled if they do not comply.

Chapter 9, The Robustness of Reciprocity.

  • Cooperation can get started by even a small cluster of individuals who are willing to reciprocate cooperation, even in a world where no one else will cooperate.
  • Once cooperation is establish, it protects itself from invasion by non-cooperative strategies.
  • The foundation of cooperation is the durability of the relationship, which allows agents to learn about each other in order to cooperate.
Syndicate content