Utilitarian individualism and social dilemmas

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Utilitarian individualism and social dilemmas

• Lecture 4
• May 16, 2006

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1. Societies or individuals?

• Once again What is sociology?
• Durkheim sociology as an autonomous science
• "Social facts should be explained by social
  facts"
• Two models of science
• A science is defined by
• a. an own set of phenomena to be explained
• b. an own set of explanations

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Both models are problematic

• Two problems isolationism and sociologism
•  -gt Modesty and openness
• -gt Critical thinking about classical theories
• Diagnosis no explicit micro-foundations
• Solution methodological and utilitarian
  individualism

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2. Methodological individualism

• Principle of philsophy of science
• Always go back to the micro level
• From macro/meso to micro level
• Why does integration lead to a lower suicide
  rate? Or why does capitalism lead to inequality?
• To understand the behavior of societies or groups
  we need a model of man
• But what model of man?

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3. Utilitarian individualism

• Give me the objectives and means of the people
  and I will tell you what they will do!
• Preferences restrictions behavior
• Relative prices everything has its price
• How do we deal with scarcity? -gt Rational choice
• But people care about more than money

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4. Structure of UAF

• Utilitarianism is 4th theoretical tradition
• More theoretical traditions than problems
• Utilitarianism also gives solutions for the three
  main problems of sociology
• Examples in this lecture problems of order and
  rationalization

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5. The sociological programme

• People are goal-directed
• But they face social conditions that restrict
  their behavior (you cant always get what you
  want)
• Actions often have unintended individual and
  collective consequences
• Soziologie soll heißen eine Wissenschaft, welche
  soziales Handeln deutend verstehen und dadurch in
  seinem Ablauf und seinen Wirkungen ursächlich
  erklären will
• Max Weber, 'Wirtschaft und Gesellschaft' (1921)

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Overview of 4 theories
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6. The Wealth of Nations

• Adam Smith (1776) posed Webers problem
• P Why are some nations more wealthy than
  others?
• T Free markets division of labor more
  exchange and surplus greater wealth of all
  citizens (unintended collective consequence)
• The Invisible Hand, or Private vices, public
  benefits (de Mandeville)

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Classical additions to Smith
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7. Social dilemmas

• The Wealth of Nations is the old, substantive
  problem of economics
• Modern economics has no substantive problem
• Preferences/restrictions could be anything
• Economic imperialism is the result
• Durkheim social approval by conformity to norms
• Marx higher wages by (threat of) strikes

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Why there will be no revolution, according to the
utilitarian individualist

• Again from meso to micro level
• Marx' original Workers, unite!
• But the working class is not one person, who
  determines the best course of action for all
  workers
• There are only individual workers, who determine
  their best option for themselves
• Cf. Margaret Thatcher There is no such thing as
  society. There are individual men and women and
  there are families.

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8. Prisoners Dilemma applied to a striking
problem

• A worker makes 1 per day.
• The employer threatens to lay off striking
  workers (wage 0).
• Workers who replace a worker on strike get 300
  on first day ( 3)

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How to analyze social dilemmas

• Identify the actors in the dilemma
• What are the options (2 is easy)
• Give numbers pay-offs for yourself and the
  other
• Draw arrows dominant choice
• Where you end up is the equilibrium
• Solutions change the pay-off matrix
• Draw arrows again, and show that equilibrium
  changes

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Analysis
Solution change pay-offs
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9. Prisoner's Dilemma, general lessons

• Individual rationality leads to collective
  irrationality
• Communication does not solve the problem!
• Extra punishment for defection or extra benefits
  for cooperation
• E.g. fine commitment feeling of guilt
  repeated interaction

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10. A utilitarian reconstruction of structural
functionalism

• Durkheims original group cohesion leads to norm
  conformity
• Individualistic translation the stronger an
  individual is integrated in an intermediary
  group, the higher the likelihood that this
  individual will conform to the norms of the group
• From meso to micro
• Rule bring explanations down to the individual
  level

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Social norms and prosocial behavior

• Norms often tell you to do something that is not
  in your own material self-interest
• E.g. do not steal bikes, pay taxes, clean the
  kitchen
• These are examples of social dilemmas in real
  life good for specific others or society as a
  whole, but at a cost to individual citizens
• Your material self-interest would tell you to
  violate norms

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The Unresponsive Bystander

• Many people see a problem
• Everybody hates to see the problem
• But nobody acts
• Darley Latané, 1970
• Diffusion of responsibility among strangers
• Group cohesion solves the problem

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The puzzle

• The unresponsive bystander is an exception
• In many cases people conform to norms, but why?
• Doesnt the prisoner's dilemma prove that people
  are not like that?
• No. The PD shows that rational egoists do not
  cooperate
• Rational choice sociologists like economists
  try to explain as much as possible with the
  assumption of material self-interest

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Solutions

• Social structure often makes cooperation rational
• In many social situations, people do not act like
  rational egoists
• Material self-interest in the long run
• Psych solution Some people are less rational or
  less egoistic than assumed

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Repeated interaction

• In prisoners dilemma, actors interact only once
  (one shot game)
• Repeated interaction often solves social dilemmas
• Cooperation in game 1 can elicit cooperation in
  game 2
• Over a series of interactions, mutual cooperation
  is sustainable

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Axelrod

• Computer tournament for prisoners dilemma
• Repeated interaction
• Evolutionary rule winner multiplies
• Losers extinguish in long run

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And the winner is

• Tit for tat
• First always cooperate
• Next do as counter player did
• Simple, friendly, but unforgiving

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Why does tit-for-tat win?

• Evil strategies may exploit cooperation
• But only once!
• When evil strategies meet each other, they kill
  each other
• When friendly strategies meet, they multiply
  quickly

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So

• Repeated interaction and evolutionary rules may
  sustain cooperation
• Social order may emerge and continue to exist
• When interactions are repeated
• When cooperation is profitable
• Sounds like Durkheim
• Repeated interaction social cohesion

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Order as a collective good

• Social order is often a collective good
• We know that it would be best for all to conform
  to norms, but self-interest often deviates from
  whats best for all
• This also holds for norms and sanctions that
  uphold social order
• Social cohesion often solves the dilemma

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Social dilemma research in social psychology

• Laboratory experiments with real people
  (students)
• Prediction of 100 defection rejected
• Even when defection is very attractive, there is
  always a minority of cooperators
• Individual differences in cooperativeness

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Group size and identity

• The larger the group, the lower the cooperation
  rate
• Group identity promotes cooperation
• Field experiments diffusion of responsibility
  and uncertainty
• In PD lower anonimity, illusion of efficacy

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Communication

• Communication before game does promote
  cooperation
• People make promises
• Promises work without group identity
• And also without repeated interaction
• But because people hate to break promises
• Rule of consistency
• Social control reinforces these effects,
  especially when players know each other

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Behavioral economics

• PREFERENCES
• Material incentives do not always work
• Peopl also react (strongly) to other incentives
• social pressure, anonymity (reinventing
  sociology)
• Feeling of guilt and other psychological motives
• RATIONALITY
• People are not always rational
• Herbert Simon bounded rationality
• Uncertainty
• Gains/losses Tversky Kahnemann
• Subjective perceptions of costs and benefits
  SEU-theory