Abstract
The Nash Demand Game (NDG) has been widely employed to model the emergence of moral norms such as property rights. We criticize this use because it neglects the important role played by incentives. Since in a NDG players are assumed to divide a windfall, there is no way to model the idea that expectations concerning the way in which the pie will be divided will influence the size of the pie itself. As a remedy, we propose to replace the NDG with an alternative game we dub Produce and Divide the Dollar (PAD). It is a simple Nash Demand Game, in which the pie to be divided is the result of an investment made by one of the two agents. In Andreozzi (2007) the evolutionary version of this game in which agents are allowed to have heterogeneous preferences is analyzed. Here we use these results to claim that the PAD offers a better paradigm for the evolutionary approach to moral norms than the simpler NDG.
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