8.2 When Everyone Wants More, but Loses
155
a serious overfishing problem in many areas of the world. Last but not least, even
though schools, hospitals, roads and other useful public services require government
funding, tax evasion is a widespread problem, and public debts are growing.
Of course, the conventional economic wisdom is that contracts can enforce
cooperation, when legal institutions work well. Nevertheless, neither governments
nor companies have so far managed to fully overcome the longstanding problems
mentioned above. So, what other options do we have? In an attempt to address
this question, the following paragraphs provide a short (and far from exhaustive)
overview of the mechanisms which can encourage and sustain cooperation. These
mechanisms have played a vital role in human history, and some of them have been
so essential that they became cornerstones of world religions. This demonstrates that
they are considered to be even more powerful than man-made institutions. In fact,
rather than viewing history as a series of wars and treaties, we should view it as a
series of discoveries which reshaped the ways societies are organized.
8.3 Family Relations
“Genetic favoritism” was a very early mechanism to promote cooperation. The scientific theory of genetic favoritism elaborated by George R. Price
4 (1922–1975) posits
that the genetically closer you are to others, the more it makes sense to favor them
compared to strangers. The principle of genetic favoritism explains tribal structures
and dynasties, which have been around for a long time. In many countries they still
exist, and in some of them they come together with the custom of blood revenge.
Today’s inheritance law still favors relatives. However, genetic favoritism has a
number of undesirable side effects such as unequal opportunities for non-relatives,
ethnic conflict, or vendetta. Shakespeare’s Romeo and Juliette dramatically conveys
the rigidity of family structures in the past very well. The caste system in India
provides another example.
8.4 Scared by Future “Revenge”
What other options do we have to promote cooperation? It is known, for example,
that cooperation becomes more likely, if people interact with each other many times.
In such a setting, you may adopt a so-called “tit for tat” strategy to teach someone
else that uncooperative behavior won’t pay off. The strategy is thousands of years
old and was famously described in the Old Testament as “an eye for an eye, a tooth
for a tooth” (Exodus 21:24).
Today, the underlying success principle is called “the shadow of the future”. The
effectiveness of revenge strategies was studied by Robert Axelrod (*1943) in a series
4 Price [1].
155
a serious overfishing problem in many areas of the world. Last but not least, even
though schools, hospitals, roads and other useful public services require government
funding, tax evasion is a widespread problem, and public debts are growing.
Of course, the conventional economic wisdom is that contracts can enforce
cooperation, when legal institutions work well. Nevertheless, neither governments
nor companies have so far managed to fully overcome the longstanding problems
mentioned above. So, what other options do we have? In an attempt to address
this question, the following paragraphs provide a short (and far from exhaustive)
overview of the mechanisms which can encourage and sustain cooperation. These
mechanisms have played a vital role in human history, and some of them have been
so essential that they became cornerstones of world religions. This demonstrates that
they are considered to be even more powerful than man-made institutions. In fact,
rather than viewing history as a series of wars and treaties, we should view it as a
series of discoveries which reshaped the ways societies are organized.
8.3 Family Relations
“Genetic favoritism” was a very early mechanism to promote cooperation. The scientific theory of genetic favoritism elaborated by George R. Price
4 (1922–1975) posits
that the genetically closer you are to others, the more it makes sense to favor them
compared to strangers. The principle of genetic favoritism explains tribal structures
and dynasties, which have been around for a long time. In many countries they still
exist, and in some of them they come together with the custom of blood revenge.
Today’s inheritance law still favors relatives. However, genetic favoritism has a
number of undesirable side effects such as unequal opportunities for non-relatives,
ethnic conflict, or vendetta. Shakespeare’s Romeo and Juliette dramatically conveys
the rigidity of family structures in the past very well. The caste system in India
provides another example.
8.4 Scared by Future “Revenge”
What other options do we have to promote cooperation? It is known, for example,
that cooperation becomes more likely, if people interact with each other many times.
In such a setting, you may adopt a so-called “tit for tat” strategy to teach someone
else that uncooperative behavior won’t pay off. The strategy is thousands of years
old and was famously described in the Old Testament as “an eye for an eye, a tooth
for a tooth” (Exodus 21:24).
Today, the underlying success principle is called “the shadow of the future”. The
effectiveness of revenge strategies was studied by Robert Axelrod (*1943) in a series
4 Price [1].