Cooperation, Negotiation, Conflicts of Interest, and Social Norms

4.9 of The Economy 1.0 & The Economy #3

What does cooperation entail?

-Where participating in a common project that is intended to produce mutual benefits

-Not necessarily based on agreement

Examples of players acting independently and achieving a cooperative outcome?

Invisible Hand: Farmers choose their crops in pursuit of their own interests, but produces a mutually beneficial division of labour

Repeated prisoners’ dilemma: May refrain from using a destructive pesticide, because the future losses may be enormous

Public goods game: Players’ willingness to punish others allowed for cooperation to remain high.

Suppose you pick up £100. What are some reasons one would give it to another person/friend?

Social Norms: If you grew up in an environment where you split 50-50, you may be more influenced to split in such a way

Altruism: May care for the other being happy, or their well-being

Fairness: If the person thinks that 50-50 is fair, then that hints a trait of being averse to inequality

Reciprocity: He gives and expects to be treated generously because of such an action.

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