Are variations in economic games really caused by culture?

Last month, Science published an research article by Joe Henrich et al. showing that market integration and participation in world religion covary with fairness ('Markets, Religion, Community Size, and the Evolution of Fairness and Punishment'). The team had people from various societies play experimental economic games in which a sum of money given by the experimenter has to be distributed in various ways. The results are presented as supporting cultural evolution theories and contradicting the hypothesis that successful social interaction in large-scale societies arise directly from an evolved psychology. This conclusion might be a bit premature though.
 

Can we make sense of Henrich et al.'s results in terms of an innate psychology? I think we can. Indeed, much research in behavioural economics supports the idea that humans have a sense of fairness that aims to equilibrate exchanges among individuals. In economic games where money needs to be distributed, for instance, people carefully respect everyone's rights over the stake: If the common good is produced by a single person, she is granted more rights over the money (see here and here for instance); similarly, the most productive partner during the joint production phase is favoured (see here or here).

Economic games are notoriously underdetermined: Participants are given a lump of money to distribute with no information as to where it comes from, who owned it in the first place, who the receiver is, and so on. As the authors have noted in previous papers, participants have no other choice but to fill this informational gap by drawing on their everyday life experience. Since participants in more market integrated societies have more experience in sharing goods and investing with others, they spontaneously attribute more rights to the other participant and consequently allow her more money.

As for religion, the article demonstrates a correlation between participation in a world religion and generosity in economic games. The authors write that this result

"converges with other recent findings and tentatively supports the notion that religion may have coevolved with complex societies to facilitate larger-scale interactions."

However, it could be very easily the other way around! Indeed, world religions naturally enjoy a better success in bigger societies where people are used to share ownership. Due to their universalistic perspective, they look much more relevant for potential believer than ethnically bounded religion. Consequently, world religions, market integration and joint ownership are very likely to covary not because world religions cause or select joint ownership but rather because market integration (and bigger societies) makes world religion more relevant (which then covaries with joint ownership in economic games). Thus, an innate preference for fairness is not only fully compatible with Henrich et al.'s results. It is also theoretically more parsimonious and empirically more valid.

This explanation based on an innate sense of fairness also fits better with the economic literature on institutions and cooperation. Indeed, contrary to what the authors suggest, Nobel prize economists Douglass North and Elinor Ostrom have shown that variability in cooperation is not explained by different norms but rather by different system of incentives (reward and penalties) organized by local communities or States (see my previous post on Ostrom). What institutions do is to add some further incentives to cooperate on top of morality. Take the case of taxes for instance. I may think that we ought to pay our taxes but be tempted to hidden some of my revenues. Luckily (for the public good), the tax controller is here to motivate me to declare everything. In other words, institutions do not transform people's values. Everywhere people think that public benefits and public burdens should be shared in a fair way. Institutions just make easier to share these benefits and burdens.

(An extended version of this arguments can be found here)

9 Comments

  • Dan Sperber
    Dan Sperber 1 May 2010 (02:22)

    Henrich et al.’ could be criticized for demonstrating a trivially true conclusion when arguing that “modern prosociality is not solely the product of an innate psychology, but also reflects norms and institutions that have emerged over the course of human history”. [When will [i]Science[/i] publish a study demonstrating through experiments administered across 15 diverse populations that modern sexual practices are not solely the product of innate dispositions?]. It seems to me obvious that [u]any[/u] psychological disposition in human adults, or, for that matter, in children past early infancy, results from the interaction of “innate” predispositions and environmental (and in particular cultural) factors. Hence I find Nicolas’ challenge rather Quixotic. So formulated, it seems to actually justify Henrich et al.’s effort by suggesting that the conclusion that others, myself included, might see as trivial, is in fact quite controversial and hence worth investigating and defending. I see the interesting question — or rather range of questions — as being that of the ways in which genetic and environmental factors interact both in socio-cultural history and in individual development. I wish Henrich et al. had discussed their experiments in such an anthropologically and psychologically informed, fine-grained manner (but then this would not be good for [i]Science[/i], even it would be good for science). Nicolas’ critical comments, while explicitly aimed at refuting Henrich et al.’s broad conclusion, are interesting in that they outline one direction in which such a fine-grained analysis could go. All the same, Nicolas’ proposal is, and had better be, an analysis of the specific ways in which “modern prosociality […both is…] the product of an innate psychology […and…] reflects norms and institutions that have emerged over the course of human history.”

  • Olivier Morin
    Olivier Morin 1 May 2010 (22:04)

    The claims of Henrich and his coauthors seems much less benign to me than what Dan thinks. Theirs is not just a claim that human pro-social and economic behavior is not everywhere the same, and is influenced by people’s social environments – that indeed would be trivial. They are also trying to prove, in this paper and others, that the variations they observe are caused, not just by the surrounding economic and social conjuncture, but by culturally transmitted norms. ‘Cultural’ here does not just mean social. It means a norm of behaviour specific to a society and maintained for generations inside that society – and not, for example, a response to their current economic and social circumstances. That conclusion is far more ambitious than the claim that ‘not everything is innate and universal’. It is also, I’d agree with Nicolas, a fragile conclusion built on mere correlations that can be interpreted in many different ways. I think that this conclusion passes as trivially true to many people, because we (I mean people who were trained to think in the terms of the nature/nurture debate) sometimes tend to lump social life, culture and institutions together undiscriminately. Just because a behavior is sensitive to one’s social or economic context does not mean it is dictated by a culturally transmitted norm. There is a non-trivial difference here.

  • Dan Sperber
    Dan Sperber 1 May 2010 (22:22)

    Yes, I agree with Olivier that Henrich et al. have a stronger and more interesting thesis that the one they explicitly defend. But their main explicit claim in the paper that Nicolas discusses is this truism that “modern prosociality is not solely the product of an innate psychology, but also reflects norms and institutions that have emerged over the course of human history.” It is this truism that Nicolas explicitly challenges in his post (even if I agree with what I guess he actually has in mind). As for lumping “social life, culture and institutions together undiscriminately”, well, I am in favor of lumping them together, but discrimately, if I may put it that way.

  • Olivier Morin
    Olivier Morin 2 May 2010 (11:31)

    “such experiments elicit norms, or reflect institutions, that have evolved to facilitate interactions among individuals not engaged in durable relationships. (…) Overall, these findings support the idea that the evolution of societal complexity (…) involved the selective spread of those norms and institutions that best facilitated the successful exchange and interaction in socioeconomic spheres (…) the rate-determining step in societal evolution may have involved the asembly of the norms and institutions that are capable of harnessing and extending our evolved social psychology (…) the gradual honing of these norms and institutions continues in modern societies”. Henrich et al. p. 1484 The crucial distinction, I think, is between “eliciting norms” and “reflecting institutions”. I would agree that these experiments reflect the way markets work in their area, but I think there is not enough evidence to claim that, in most cases, they elicit specific norms of prosociality.

  • Nicolas Baumard 2 May 2010 (16:03)

    I agree with Dan. There is no doubt that cultural norms play an important role in influencing cooperation (Maurice and Dan gave a wonderful illustration of how cultural norms shape innate psychology by studying the relationship between the mother’s son and the brother’s sister, see our [url=http://www.dan.sperber.fr/wp-content/uploads/2009/09/blochsperber.pdf]reader[/url]). That said, my point was not that cultural norms do not play a role in cooperative behaviour but rather, as Olivier said, that it is not the only way to explain behavioural variability. Many times, one can explain variability by basic ecological factors such as, in Henrich’s example, the existence of institutions. More generally, it seems to me that we, in cognition and culture, too often jump onto cultural transmission and forget the role of basic situational factors. Take for instance all the recent papers about the role of religion shaping economics (the revival of Weber’s hypothesis[url=http://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism][/url]). It’s very tempting to say that Western’s success is due to cultural norms and religious belief such as Puritanism or divine punishment. However, I think that there is a much parsimonious explanation, namely that the West had better institutions. China offers us a very clear example. Take Confucian Chinese, add some capitalist institutions, and twenty years later you observe the rise of a western economy among the same Confucian culture (or, as I describe in an earlier [url=http://www.cognitionandculture.net/index.php?option=com_content&view=article&id=628:on-the-use-of-natural-experiments-in-anthropology&catid=37:nicolas&Itemid=34]post[/url], take Protestant German, add capitalist institutions – with the help of French revolutionary armies – and fifty years later, you get an Industrial Revolution). In the Chinese example (as well as in the German example), there is no need to invoke transmitted norms (not to mention cultural selection and religious beliefs) to explain the shift of economics relationships among people. What you only need is, for instance, to implement efficient property rights, break some monopolies, and open the market to everyone (see again the institutional economists such as [url=http://www.amazon.co.uk/Mystery-Capital-Capitalism-Triumphs-Everywhere/dp/0465016154/ref=sr_1_2?ie=UTF8&s=books&qid=1272808646&sr=8-2]Hernando de Soto[/url]).

  • Dan Sperber
    Dan Sperber 3 May 2010 (03:55)

    So, We may well agree on the case at hand, but we might disagree on this: are institutions part of culture? Olivier was cautioning us against taking this for granted, and Nicolas reply and title seems to suggest that if variations are not caused by transmission of norms (or I imagine, other contents, but institutions are not contents), then they are not caused by culture. Shows either that I still have work to do to convince you that institutions are cultural things, or I still have work to do to backtrack and admit that they are not (i’ll try and go the first way).

  • Olivier Morin
    Olivier Morin 3 May 2010 (09:41)

    To Dan – of course I agree that institutions are cultural in a large sense – yours. They are social things, they involve sharing and spreading representations. But what Henrich, Boyd, Gintis Fehr etc. have in mind when they talk of culture, in most of their theoretical papers, is a set of norms specific to a society and passed on for many generations, subject to cultural group selection, etc. If this is the kind of culture we are talking about, I’d readily agree that many institutions are cultural to some extent. But I see many examples of institutions that are not very cultural in that sense (the Euro, the GM bailout, this blog…). This distinction makes a real difference : if people’s economic behaviour is influenced by the way economic institutions work around them, I am not surprised. But if one claims that their behaviour reflects norms passed on for many generations, norms that have insured the society’s survival against competitors, then I find room for doubts.

  • Nicolas Baumard 3 May 2010 (15:21)

    There is no doubt that institutions are cultural. May be we just disagree on our reading of the article. As Olivier says, in Henrich et al. framework, cooperative behaviours are explained by internalized norms: “Human preferences are programmable and are often internalized, just as are aspects of our culinary and sexual preferences” (Henrich, et al., 2005, p. 813). My point was that you do not need these internatilized norms. Institutions are enough. Of course, there is no doubt that institutions exist through the minds of those who run the institutions. But they do not have to be in everyone’s mind, nor even “internalized” in the sense of an unconscious and bounding behaviour.

  • Dan Sperber
    Dan Sperber 3 May 2010 (20:09)

    So we agree, but my initial reaction was to the fact that, in my opinion, Nicolas, in his discussion and in particular in his title overshot. Henrich et al., adapting to the needs of a superficial journal like [i]Science[/i], simplify their main claim to the point of triviality and Nicolas does not, in his critical post, distance himself from this simplification.