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  and  for instance); similarly, the most productive partner during the joint production phase is favoured (see  or ).
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 argument can be found here)
 Oxoby, R. J., & Spraggon, J. (2008). Mine and yours: Property rights in dictator games. Journal of Economic Behavior & Organization, 65(3-4), 703-713.  Cherry, T. L., Frykblom, P., & Shogren, J. F. (2002). Hardnose the dictator. American Economic Review, 92(4), 1218-1221.  Frohlich, N., Oppenheimer, J., & Kurki, A. (2004). Modeling other-regarding preferences and an experimental test. Public Choice, 119, 91-117.  Cappelen, A. W., Hole, A. D., Sørensen, E. Ø., & Tungodden, B. (2007). The pluralism of fairness ideals: An experimental approach. American Economic Review, 97(3), 818-827.