By Pierre Bourdieu (London: Routledge, 2010), xxx + 607 pp. £15.99 paper. A combination of social theory, statistical data, illustrations, and interviews, Distinction: A Social Critique of the Judg...

Distinction: A Social Critique of the Judgement of Taste

The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect

Precautionary Saving in the Small and in the Large

Researchers from across the social sciences have found consistent deviations from the predictions of the canonical model of self-interest in hundreds of experiments from around the world. This research, however, cannot determine whether the uniformity re- sults from universal patterns of human behavior or from the limited cultural variation available among the university students used in virtually all prior experimental work. To address this, we undertook a cross-cultural study of behavior in ultimatum, public goods, and dictator games in a range of small-scale societies exhibiting a wide variety of economic and cultural conditions. We found, first, that the canonical model - based on self-interest - fails in all of the societies studied. Second, our data reveal substantially more behavioral vari- ability across social groups than has been found in previous research. Third, group-level differences in economic organization and the structure of social interactions explain a substantial portion of the behavioral variation across societies: the higher the degree of market integration and the higher the payoffs to cooperation in everyday life, the greater the level of prosociality expressed in experimental games. Fourth, the available individual-level economic and demographic variables do not consistently explain game behavior, either within or across groups. Fifth, in many cases experimental play appears to reflect the common interactional patterns of everyday life.

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“Economic man” in cross-cultural perspective: Behavioral experiments in 15 small-scale societies

The Righteous Mind: Why Good People Are Divided by Politics and Religion Jonathan Haidt Pantheon Books, 2012One has likely heard that, for the sake of decorum, religion and politics should never be topics of conversation with strangers. Even amongst friends or even when it is known that others hold opposing political or religious views, why is it that discussion of religion and politics leads to visceral-level acrimony and that one's views are right and the other's views are wrong? Professor Jonathan Haidt of the University of Virginia examines the psychological basis of our "righteous minds" without resorting to any of the pejorative labeling that is usually found in a book on politics and religion and eschews a purely comparative approach. Haidt proposes the intriguing hypothesis that our visceral reaction to competing ideologies is a subconscious, rather than leaned, reaction that evolved over human evolution to innate senses of suffering, fairness, cheating and disease, and that moral foundations facilitated intra-group cooperation which in turn conferred survival advantages over other groups. These psychological mechanisms are genetic in origin and not necessarily amenable to rational and voluntary control - this is in part the reason debating one's ideological opposite more often leads to frustration rather than understanding. Haidt also suggests that morality is based on six "psychological systems" or foundations (Moral Foundations Theory), similar to the hypothesized adaptive mental modules which evolved to solve specific problems of survival in the human ancestral environment.While decorum pleads for more civility, it would be better, as Haidt suggests, dragging the issue of partisan politics out into the open in order to understand it and work around our righteous minds. Haidt suggests a few methods by which the level of rhetoric in American politics can be reduced, such that the political parties can at least be cordial as they have been in the past and work together to solve truly pressing social problems.There are a number of fascinating points raised in the current book, but most intriguing is the one that morality, ideology and religion are products of group selection, as adaptations that increased individual cooperation and suppressed selfishness, thereby increasing individual loyalty to the group. That morality, political ideology and religion buttress group survival is probably highly intuitive. However, given the contemporary focus on the individual as the source of adaptations, to the exclusion of all else, to suggest that adaptations such as religion and political ideology arose to enhance survival of groups is heresy or, as Haidt recounts, "foolishness". While previous rejection of group selection itself was due in part to conceptual issues, one could also point out the prevailing individualist social sentiment, "selfish gene" mentality and unrelenting hostility against those who supported the view that group selection did indeed apply to humans and not just to insects. Haidt gives a lengthy and convincing defense of group selection, his main point being that humans can pursue self- interest at the same time they promote self-interest within a group setting - humans are "90 percent chimp, 10 percent bees". One can readily observe in the news and entertainment mediate that religion is a frequent target of derision, even within the scientific community - Haidt points to the strident contempt that the "New Atheists" hold for religion. They claim that religion is purely a by-product of an adaptive psychological trait and as a mere by-product religion serves no useful purpose. However, the religious "sense" has somehow managed to persist in the human psyche. One explanation by the New Atheists of how religion propagated itself is that it is a "parasite" or "virus" which latches onto a susceptible host and induces the host to "infect" others. As a "virus" or "parasite" that is merely interested in its own survival, religion causes people to perform behaviors that do not increase their own reproductive fitness and may even be detrimental to survival, but religion spreads nonetheless. …

The Righteous Mind: Why Good People Are Divided by Politics and Religion

Over the last 25 years, more than a hundred dictator game experiments have been published. This meta study summarises the evidence. Exploiting the fact that most experiments had to fix parameters they did not intend to test, in multiple regression the meta study is able to assess the effect of single manipulations, controlling for a host of alternative explanatory factors. The resulting rich dataset also provides a testbed for comparing alternative specifications of the statistical model for analysing dictator game data. It shows how Tobit models (assuming that dictators would even want to take money) and hurdle models (assuming that the decision to give a positive amount is separate from the choice of amount, conditional on giving) provide additional insights.

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Dictator games: a meta study

This paper reports the findings of a meta-analysis of 37 papers with 75 results from ultimatum game experiments. We find that on average the proposer offers 40% of the pie to the responder. This share is smaller for larger pie sizes and larger when a strategy method is used or when subjects are inexperienced. On average 16% of the offers is rejected. The rejection rate is lower for larger pie sizes and for larger shares offered. Responders are less willing to accept an offer when the strategy method is employed. As the results come from different countries, meta-analysis provides an alternative way to investigate whether bargaining behavior in ultimatum games differs across countries. We find differences in behavior of responders (and not of proposers) across geographical regions. With one exception, these differences cannot be attributed to various cultural traits on which for instance the cultural classifications of Hofstede (1991) and Inglehart (2000) are based.

http://www.economists.nl/files/20070906-OosterbeekSloofVandekuilenEE2004.pdf

Cultural differences in ultimatum game experiments: Evidence from a meta-analysis

This article presents the results of an experiment that completely measures the utility function and probability weighting function for different positive and negative monetary outcomes, using a representative sample of N = 1,935 from the general public. The results confirm earlier findings in the lab, suggesting that utility is less pronounced than what is found in classical measurements where expected utility is assumed. Utility for losses is found to be convex, consistent with diminishing sensitivity, and the obtained loss-aversion coefficient of 1.6 is moderate but in agreement with contemporary evidence. The estimated probability weighting functions have an inverse-S shape and they imply pessimism in both domains. These results show that probability weighting is also an important phenomenon in the general population. Women and lower educated individuals are found to be more risk averse, in agreement with common findings. In contrast to previous studies that ascribed gender differences in risk attitudes solely to differences in the degree utility curvature, however, our results show that this finding is primarily driven by loss aversion and, for women, also by a more pessimistic psychological response toward the probability of obtaining the best possible outcome.

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A parametric analysis of prospect theory’s functionals for the general population

We conduct an experiment to study the prevalence of the higher order risk attitudes of prudence and temperance, in a large demographically representative sample, as well as in a sample of undergraduate students. Participants make pairwise choices between lotteries of the form proposed by Eeckhoudt and Schlesinger (2006). The choices in these lotteries isolate prudent from imprudent, and temperate from intemperate, behavior. We relate individuals’ risk aversion, prudence, and temperance levels to demographics and financial decisions. We observe that the majority of individuals’ decisions are consistent with risk aversion, prudence, and temperance, in both the student and the demographically representative sample. An individual’s level of prudence is predictive of his wealth, saving, and borrowing behavior outside of the experiment, while temperance predicts the riskiness of portfolio choices. Our findings suggest that the coefficient of relative prudence for a representative individual is approximately equal to two.

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Higher Order Risk Attitudes, Demographics, and Financial Decisions

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http://www.economists.nl/files/20090710-AcceptedProof.pdf

Gijs van de Kuilen

Papers

Cultural differences in ultimatum game experiments: Evidence from a meta-analysis

A parametric analysis of prospect theory’s functionals for the general population

Higher Order Risk Attitudes, Demographics, and Financial Decisions

Higher Order Risk Attitudes, Demographics, and Financial Decisions

A parameter-free analysis of the utility of money for the general population under prospect theory