Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2013:14: The Social Egoist

Anne Boschini (), Astri Muren () and Mats Persson ()
Additional contact information
Anne Boschini: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Astri Muren: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Mats Persson: Institute for International Economic Studies, Stockholm University, Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden.

Abstract: People cooperate more in one-shot interactions than can be explained by standard textbook preferences. We discuss a set of non-standard preferences that can accommodate such behavior. They are social, in the sense of incorporating the payoffs of other persons; they are also norm-based, in the sense of taking into account the behavior of other persons. We show theoretically that, with such preferences, a Nash equilibrium with a strictly positive cooperation rate can exist. We use experimental data on within-subject decisions to show that such preferences are empirically plausible. The data show that, in addition to the well-known types (egoist, altruist, reciprocator), there is an important group: the social egoist. Such individuals care for people who have cooperated, but ignore people who have broken the implicit cooperation norm in society. The social egoists, who turn out to be different from “conditional cooperators”, account for one third of the observations in our experiment.

Keywords: social norms; prisoner’s dilemma; hawk-dove game; egoism; altruism; reciprocity; conditional cooperation

JEL-codes: C91; D03; D64

42 pages, October 10, 2013

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