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Behavioural economics

A caring majority secures the future

An experiment studying people's willingness to sacrifice personal gains so that resources are passed to future generations shows that this occurs only when extractions by free-riders are curbed by majority rule. See Letter p.220

What kind of world will we pass on to those who follow us? Most of us would like to leave a liveable, green planet, but are 'most of us' enough to turn current environmental trends around, and are we willing to sacrifice enough to make a real difference? In this issue, Hauser et al.1 (page 220) present the results of a decision-making experiment, involving participants hired through an online job marketplace, that helps us to think more clearly about these questions. The authors found impressive evidence of majority willingness to sacrifice personal gains for future generations, but they show that whether such majorities are adequate for the task depends on whether choices are made individually or by group decision.

Social dilemmas are those all-too-common situations in which an individual's pursuit of self-interest leads to a collectively inferior outcome. The common-pool resource game (with its familiar 'tragedy of the commons' prediction) and the prisoner's dilemma game are two well-known examples that can demonstrate such outcomes2. Public-choice theory suggests that optimal decisions are possible in social dilemmas if groups can vote on rules that will be binding on all participants3. However, the dilemma game that Hauser et al. studied does not automatically yield to voting because it is an intergenerational game, so most of the affected parties represent unborn generations and thus cannot be in the present voting group.

The authors' game involves groups (generations) of five individuals, who must decide individually or collectively how much to withdraw for themselves from a common resource pool that can replenish itself and be passed along to a next generation only if the sum of extractions is below a critical level (Fig. 1). Many such generations can potentially benefit from the resource pool, but if the members of any one generation think of themselves only, future generations will be left with nothing. Under these circumstances, strong concern for future generations is necessary if an outcome that is jointly optimal for all potential generations is to be achieved.

Figure 1: Leaving enough for those to come.
figure1

a, In Hauser and colleagues' experiment1, each generation can pass a self-replenishing pool of resources on to the next generation, but only if over-extraction from that pool is avoided. The experiment is analogous to the living human population's stewardship of Earth's biological, geological and atmospheric resources. b, Over-extraction, in the experiment, means the next generation gets nothing.

Traditional game theory assumed that people were not only rational but also strictly selfish. However, social scientists, including economists, have been amassing evidence that many people are at least conditionally willing to act for the greater good if assured that others will also do so4. Hauser and colleagues' paper stands at the crossroads of the behavioural study of social preferences, as economists call them, and the formal logic of public-choice theory.

In contrast to the vibrant social-dilemmas field as a whole, the intersection of public-choice analysis with behavioural economics has been understudied until recently. Social-dilemma experiments show that cooperation tends to diminish over time if the cooperatively inclined have no way of defending themselves against self-serving 'free riders'. Empowering cooperators with the ability to punish free-riders helps in some settings5, but unless appropriate norms or enforcement mechanisms are worked out, benefits may be undermined by retaliation and feuding6. Enforcing rules that have been agreed by a vote is a mechanism that can work well if conditional cooperativeness is common and if antisocial or strictly selfish propensities mark only a minority7.

In their intergenerational game, Hauser and colleagues find that, when decisions are made by individuals acting independently, the resource pool usually collapses despite majority pro-sociality, because it takes only one or two over-extractors to push the combined withdrawal of resources past the point of no return. When decisions are made by majority voting, however, these over-extractors are outnumbered. And, in an important bonus, the majority's ranks actually swell thanks to the assurance that voting gives to conditional cooperators that they will not be taken advantage of.

The degree of concern that Hauser and colleagues' participants exhibited for members of later groups, whom they will never know, is likely to surprise many. These individuals, who were hired from the online marketplace Amazon Mechanical Turk and are presumably relying on this part-time work to make ends meet, had to voluntarily forgo half of their prospective bonus to pass the resource along to the next group. Although similar degrees of concern for fairness have been exhibited by participants in other experimental studies8, it must be a lot easier for individuals to sacrifice a bonus of the order of pocket change than for societies to vote for major sacrifices, such as trading in their cars for bicycles and public transport. In other ways, however, the authors' experimental design favours less, rather than more, sacrifice: most real-world individuals have direct concerns for their children and grandchildren, which confer an emotional stake in the future, but there are no analogous connections for the anonymous online employees.

There are also other difficulties with extrapolating this experiment's remarkable results to the solution of global environmental issues. One major problem lies in the fact that the enforcement machinery that would be needed to put Hauser and colleagues' mechanism to work on a global scale does not yet exist — as exemplified by the lack of international consensus over the Kyoto Protocol. Thus, the encouraging finding that majorities are willing to sacrifice if they are assured that others will join in, and the recognition that majority rule can constrain selfish minorities, must be matched by sufficient assent to adopting the relevant enforcement structure.

On this point, existing evidence offers a glimmer of hope. Recent decision experiments9,10 let participants determine, by voting, whether to adopt rules that were made binding on group members by administrative punishment, or to operate in a regime with only peer-to-peer sanctioning available. When the centralized-enforcement regime was available at low cost, these studies found that majorities tended to favour it. Members of the minority that had displayed the antisocial behaviour of punishing cooperators often voted against the regime, but they were outnumbered. Hauser and colleagues' findings provide further evidence that a behavioural approach to public choice can help to elucidate issues of first-order importance, and that experimental techniques can complement theoretical analysis and observations in natural settings to yield insights that may prove to be crucial to a sustainable society.

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Correspondence to Louis Putterman.

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Putterman, L. A caring majority secures the future. Nature 511, 165–166 (2014). https://doi.org/10.1038/nature13510

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