Chapter 5 - Emergence of Prosocial Behavior

Abstract

In this chapter, self-interest is not of the only human motivation. Throughout their lifetime, people depend on frequent and varied cooperation with others. In the short-run, it would be advantageous to cheat. In the long-run, people are likely to cooperate in a mutually beneficial manner. This would make them better able to resist the temptation to cheat in the first place, and would enable them to generate a reputation for being cooperative. People are, in real life, affected by psychological and emotional factors. People exhibit prosocial behavior when they do not always make choices that maximize their own pecuniary payoffs. Formal models of social preferences assume that people are self-interested, but are also concerned about the payoffs of others. That is, a player’s utility function not only depends on his or her material payoff, but may also be a function of the allocation of resources within his or her reference group. People have social preferences if, and only if, they exhibit prosocial behavior and have relatively stable social preferences.