Samuel Bowles, Herbert Gintis

Paper #: 02-07-028

Adherence to social norms is underwritten not only by the cognitively mediated pursuit of self-interest, but also by emotions. Shame, guilt, pride, regret, joy, and other visceral reactions play a central role in sustaining cooperative relations, including successful transactions in the absence of complete contracting. Prosocial emotions function like the basic emotion, “pain,” in providing guides for action that bypass the explicit cognitive optimizing process that lies at the core of the standard behavioral model in economics. We consider a public goods game where agents maximize a utility function that captures five distinct motives: personal material payoffs, one's valuation of the payoffs to others, which depend both on one's altruism and one's degree of reciprocity, and one's sense of guilt or shame in response to one's own and others' actions. We present empirical evidence suggesting that such emotions play a role in the public goods game, and we develop an analytical model and an agent-based simulation showing that reciprocity, shame, and guilt increase the level of cooperation in the group. Finally, we provide an explanation of the long-term evolutionary success of prosocial emotions in terms of both the individual- and group-level benefits they confer.