The Grammar of Society (Bicchieri 2006): Norms Matter p113

To infer another person's intention or motive, we consider not only the action chosen, but also the actions that were not chosen but, as far as we know,could have been chosen.

A deviation from equal sharing will be mainly due to:
(a) the presence of appropriate and acceptable justifications for taking more than an equal share
(b) the shift to a very different script that involves different roles and expectations.

Moral Wiggle Room (Dana, Weber and Kuang 2007)

Binary dictator game: transparent vs. non-transparent treatments

Baseline: X: dictator Y: receiver

Hidden Information:
X can choose to reveal or not the payoff of Y


Multiple Dictator:
X,Y: dictators
Z: receiver
Only both X and Y choose fair outcome, fair outcome appears


Plausible deniability
X can choose not to make a decision by being cut-off. Y doesn't know whether the action is chosen by X or randomly chosen.

Deliberational Route vs. Heuristic Route

Bicchieri (2006, p4) proposed that human beings have two decision routes: deliberational route and heuristic route. We make most of our decisions by the heuristic route, without spending too much time and mental effort. We know how tiring it is to monitoring one’s thoughts, and it must be suffocating to deliberate before each action. The existence of the heuristic route is an evolutionary advantage, because attention is a scarce resource for us, and we’d better use it where it is needed most. Hence, we do not gauge the costs and benefits of each available action under the constraints before reaching a decision. We use simple and useful heuristics, we follow social norms and conventions, and we conform to moral standards. These norms and standards and rules are so inherent in our life that under most circumstances we make decisions without too much thinking.

We don’t make decisions the way neoclassical economists assume. We seldom, if not never, look forward and check the possibility of each outcome of each action, then calculate costs and benefits using backward induction before taking an action.

Deliberational routes when we encounter new situations in which we don’t have previous experience or the behavior of other people to depend on. Instead of looking forward and calculate potential losses and gains to decide which action to take, individuals look back (learn) and look around (imitate) to form expectations and make decisions.

Intergenerational Cooperation

The accumulation and transmission of knowledge is a type of inter-generational cooperation. For the benefit of the next generation, each generation spends time and effort to pass down its knowledge to the next generation, and the whole society better off.

Taking care the old is another type of inter-generational cooperation.  For the benefit of the next generation, each generation spends time and effort to takes care of the old, and the whole society better off.

Specialization

Specialization greatly promotes economic growth. This is such a widely accepted truth for economists that they tend to take it for granted without thinking too much of it. But if we stop and think for a while, specialization is definitely not a natural phenomenon. In order for specialization to happen, the economic system needs to come up with an ingenious way to coordinate the behavior of all the economic agents. In essence, specialization is an all-encompassing coordination and cooperation among all the economic agents in the economic system. It starts to appear really puzzling when we notice that there is no central planner giving commands to people instructing them what to do. The market system just works like an invisible hand, putting people to where they should be and generate an efficient outcome for the society. 

outreg2

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Freedom and Economic Development

“The correlation between economic freedom and economic development is surely not a mere statistical association. There is a systematic causal force, identified by Adam Smith back in 1776, in The Wealth of Nations. People grow wealthier when they have the freedom to participate in the market process.”