1 of 19

Altruism in Networks

with its extension

2 of 19

Elements of Network

  • Node (Player)
  • Link (Arc)
  • Path and Direction
  • Cycle and Acyclic
  • Tree and forest

​

3 of 19

Altruism in literature

  • Barro (1974) - “Dynastic family”
  • Becker (1974) - Utility function with social interaction
  • Güth, Schmittberger and Schwarze (1982) - A fairness in ultimatum bargaining game.
  • Axelord and Hamilton (1981) - Tit-for-Tat
  • Andreoni and Miller (1993) – Cooperation in the Finitely Repeated Prisoner's Dilemma
  • Fehr and Schmidt (2002) – Altruistic punishment in humans
  • Gürerk et al. (2006) - The Competitive Advantage of Sanctioning Institutions

​

​

​

​

4 of 19

Set up

  •  

5 of 19

Set up

  •  

6 of 19

Equilibrium analysis

  •  

7 of 19

Equilibrium analysis

  •  

8 of 19

Equilibrium analysis

  • Example 1

​

9 of 19

Equilibrium analysis

  •  

10 of 19

Comparative Statics

  •  

11 of 19

Change in income

  • Example 3.

​

12 of 19

Comparative statics

  •  

13 of 19

Change in the Altruism Networks

  • EXAMPLE 4

14 of 19

Altruistic punishment in humans

15 of 19

Some stylized facts

​

  • Non-executed punishment threat itself can increase altruistic

behaviors.

​

  • But Punishments happen.

​

  • More altruistic players punish harder.

​

16 of 19

Altruistic punishment in Networks

  •  

17 of 19

Some examples

i

j

k

i

j

k

i

j

k

 

 

 

i

i

j

k

k

j

 

 

8

2

0.5

4.5

0

7.5

2.5

2.2

4

2.4

0

1.6

1

8

7

3

0.8

5

0

0

0

0

0

2

3

18 of 19

Implications

  1. Fulfillment of stylized facts
  2. Non-transitivity
  3. Taking the “institutional parameter” into consideration

19 of 19

Reference

  • Andreoni, James, and John H. Miller. “Rational Cooperation in the Finitely Repeated Prisoner’s Dilemma: Experimental Evidence.” The Economic Journal 103, no. 418 (1993)
  • Axelrod, Robert and Hamilton, William D. "The evolution of cooperation." Science. 211, (1981)
  • Barro, Robert J. “Are Government Bonds Net Wealth?” Journal of Political Economy 82, no. 6 (1974)
  • Becker, Gary S. “A Theory of Social Interactions.” Journal of Political Economy 82, no. 6 (1974)
  • Bergstrom, Theodore C. “Systems of Benevolent Utility Functions.” Journal of Public Economic Theory 1, no. 1 (1999)
  • Fehr, Ernst, and Gächter, Simon. “Altruistic punishment in humans.“ Nature 415 (2002)
  • Gürerk, Özgür, Bernd Irlenbusch, and Bettina Rockenbach. “The Competitive Advantage of Sanctioning Institutions.” Science 312, (2006)
  • Güth, Werner, Schmittberger, Rolf, and Schwarze, Bernd. “An experimental analysis of ultimatum bargaining.” Journal of Economic Behavior & Organization, Volume 3, Issue 4 (1982)