Chimpanzees Only Cooperate With a Fair Distribution of Rewards!

The Yerkes National Primate Research Center's research programs are exploring how the interaction between genetics and society shape who we are, and advance knowledge about the evolutionary links between biology and behavior. Researchers there, at Georgia State University and at Emory University, have shown chimpanzees (Pan troglodytes) have a sense of fairness that was once thought as uniquely human. It suggests a long evolutionary history of the human aversion to inequity as well as a shared preference for fair outcomes by the common ancestor of humans and apes. One of the authors, Frans de Waal, says:

Until our study, the behavioral economics community assumed the Ultimatum Game could not be played with animals or that animals would choose only the most selfish option while playing. We've concluded that chimpanzees not only get very close to the human sense of fairness, but the animals may actually have exactly the same preferences as our own species.

As a direct comparison with our chimpanzee relatives, the study was extended to human children. Six adult chimpanzees and 20 human children (ages 2 – 7 years) played the Ultimatum Game. The game was played with a pair of subjects, one chosing between two differently colored tokens that could be exchanged for rewards—small food rewards for chimpanzees and stickers for children—subject to their partner's cooperation,. One token offered equal rewards to both players, whereas the other token favored the one making the choice at the expense of their partner. The chooser handed the token to the partner, who exchanged it with the experimenter for food. Thus, both partners had to agree so as to get the reward. Another author, Darby Proctor, added:

We used the Ultimatum Game because it is the gold standard to determine the human sense of fairness. In the game, one individual needs to propose a reward division to another individual and then have that individual accept the proposition before both can obtain the rewards. Humans typically offer generous portions, such as 50 percent of the reward, to their partners, and that's exactly what we recorded in our study with chimpanzees.

Both the chimpanzees and the children responded as adult humans do, typically. When the partner insisted with shows of indignation at an unfair distribution, chimpanzees and children split the rewards equally. When a partner was passive or could not reject the unfair offer, both chimpanzees and children chose the selfish option. Chimpanzees are cooperative in the wild and have apparently evolved a sensitivity to reward distributions to maintain the benefits of cooperation.

It suggests that cooperation in our relatives, the chimps, and our own species, depends upon fairness but requires the opportunity to object to, and, one surmises from other studies, to punish selfishness. The study invites consideration of the effects of unfairness in human societies, in such as the development of the law, institutions like trade unions, protest, and revolution! It seems we will respond to perceived unfairness. The distribution of wealth in the world, especially the western world is grossly unfair, and might suggest we are heading for a period of social upheaval in protest.

Game Theory Suggests Prejudice Fails When Groups Interact Frequently

Swiss researchers from ETH Zurich have used game theory to find whether prejudices might sometimes be rational. Dirk Helbing, a professor of sociology, and Thomas Chadefaux investigated the conditions under which intuitive judgements might be sensible, and when they are misleading. Using game theory in which co-operation between people is tested, they created various scenarios and played them fifteen million times.

Prejudices are generally regarded as irrational because they are not based on sufficient social experience, and as unethical because they lead to misjudgements and discrimination disrupting sociality. Yet we tend to be quick to judge others. Might prejudices have been helpful in the course of evolution? be an especially effective decision making method that has evolved

Game theory experiments on people have been done for many years, and have yielded a reliable body of results. The game players simulated on the computer behave in a friendly or unfriendly manner depending on their traits—gender, age, assets, religion or cultural background. Anyone who makes wrong decisions is outsmarted. If the player is friendly and acts in a friendly way to mean one, they get taken for a ride. To avoid it, they have to know the other players and judge what is the best way to act.

The researchers exhaustively tested five different strategies:

1. ALLD—the players play it safe and are always UNfriendly. However, they do not profit from a friendly counterpart either, and miss many opportunities to be successful.
2. TFT—“Tit For Tat” begins in being friendly and then requires copying the opposite player. In game theory, TFT is often the most successful play.
3. P1—just one trait of the opponent decides whether one is friendly or not, a matter of extreme “black and white”—prejudiced—thinking.
4. P3—three traits are taken into consideration, differentiating the decision.
5. P5—five traits are taken into consideration, making the decision more differentiated.

In all five scenarios, the researchers varied the number of participants and the duration of the game, and played the simulation a total of fifteen million times. How long the game lasts and how many participants are involved is important.

If the game only lasts for a short time and many take part, the probability that any two players will meet several times is low. So, there is less time to get to know the others. Then the unfriendly ALLD strategy is the most successful. The “black and white” strategy P1 is also effective. But the “tit for tat” strategy has the disadvantage of insufficient time to learn the opposite player’s behaviour first. So, the ALLD and black and white strategy, P1, are triumphant in short games of several players.

Their success declines rapidly when the game lasts longer. The opposite happens for the differentiated P5 and the “tit for tat” strategies. Their success only becomes apparent after a while, but then remains at a high level.

Prejudiced strategies are therefore successful and rational for brief encounters, but, as learning from mistakes is precluded and behavior has no time for adjustment, in longer more complicated encounters they yield to more subtle strategies. Thomas Chadefaux explains:

If there are only five people on an island or the people on an island have known each other for a long time, prejudices are just plain useless.

Those who are prejudiced are soon at a disadvantage, as they learn nothing new and miss many opportunities. But how close are these simulations to reality? What do they say about our everyday life? Dirk Helbing thinks:

Prejudices are—especially because they are formed quickly and easily—often convenient in the everyday world but fail when the situation becomes more complicated.

To show this, the researchers took the real world into consideration. If participants are wrongly assessed and certain traits do not necessarily have anything to with the behaviour, then what happens? Prejudiced players cannot adjust their strategy. They cannot learn and cannot improve. So, they always come up short unless the interaction is brief. Prejudice therefore is only of value to groups of people who interact briefly, as in migrant tribes coming into contact, perhaps. When people meet in a settled cosmopolitan society, subtler, differentiated strategies fare better.

What happens when the participants simply behave randomly? Then, the result deteriorates for all strategies, but, even so, the more players act randomly, the worse prejudiced players perform. Helbing explains:

While it is efficient to react to a single trait in the beginning, you must not stop learning new things in a complex world, otherwise, you miss many good opportunities.

But, developing a differentiated, and, in the long run, more successful, judgement takes time. Helbing says:

The most successful strategy is to start with simple “rules of thumb” and then to refine them.

People who gain a wide range of experiences and are willing to adapt their behavior accordingly perform the best. How you can learn new things in a targeted fashion is central. Applied in real social situations, one should encourage the mixing of different people. Helbing says:

Minorities especially have the problem that they are often wrongly treated because they are not known well enough. So, multiplying contacts with different people avoids blowing your chances of successful interactions with them. Social networks play a key role here.

How Incentives Destroy Co-operation and Will Destroy Society

Human societies depend upon each of us helping our neighbors, and not exploiting them, and about 80 percent of us are willing to participate fairly in joint projects of mutual benefit. The other 20 percent are skivers, people who will try to get the benefits with as little effort as they can get away with. The skiving free loaders are not popular with the others who pull their weight, and usually sanctions or punishments are applied to those who try to exploit other people’s mutual effort for their own gain. It is called norm enforcement, the norm being that everyone should pull their weight, and those who do not are deviants from the norm.

Data like these are not difficult to get by testing in controlled situations. If my neighbor and I could each build a house on our acre plot in six months, but by co-operating we could do a better job making use of our complementary skills and finish the two houses in eight months, then we have a clear benefit from co-operating. If the houses still took six months each and were no better, we might as well build our own, and we only have ourselves to blame for anything that goes wrong. The act of co-operating must itself have a benefit or there is no point in it. So setting up a test in which people can share a sum of money they have been given with other participants to get a benefit from the pooled resource mimics my neighbor and I helping each other build a house, as long as it is likely that by sharing we can all be better off.

In such tests, Professor Stephan Meier, Assistant Professor in Management at Columbia Business School, and co-worker, Andreas Fuster, PhD candidate, Harvard University Department of Economics, discovered that when people were given private incentives, norm enforcement became less effective. The incentives seemed to take the edge off the hard feeling towards the skivers.

1. Participants were asked to contribute to a common pool of cash to be divided equally among them all at the end of each of six rounds, whether or not all participants contributed. No kind of norm enforcement was used. People gave only small amounts to begin with, and gave less in each round.
   
2. By adding an incentive to contribute (a lottery ticket), with no opportunity to enforce norms, people contributed more gladly, including free riders.
   
3. Norm enforcement was introduced to the first test, in the shape of a fine on free riders at the end of each round. Those who were fined, most of them, increased their contributions in subsequent rounds.
   
4. Adding the lottery ticket incentive made contributors scale back their punishment of free riders by almost half, and free riders were less likely to make larger contributions in subsequent rounds whether or not they were punished. The result tended towards the previous test without incentives.
   

Fuster says:

Individual incentives can really change the structure of how we deal with one another, what the norms are, and how we enforce norms. If social forces in an organization are important, managers need to be attuned to norm enforcement and peer effects. They should understand that adding monetary incentives can dramatically change this dynamic and lead to a net negative effect.

The point is that the lottery ticket became the aim of participating, there being nothing to be gained by sharing through the common pool. Free riding therefore became irrelevant. Everyone would give just enough to get a lottery ticket, whether a free rider or not.

On the face of it the experiments are flawed. There is no co-operative gain to be made by contributing to the common fund. The pool needs to be enhanced in some way to make it more like human co-operation. Even so, it is easy to see that a separate incentive can draw attention from the whole point of a co-operative venture—the advantages of co-operating—by distracting attention from the primary objective.

It is the reason, for example, why sports can be so easily disrupted by gambling. Whatever is to be gained from illegal betting can make sportsmen actually want to sabotage the supposedly co-operative team objective, and lose for their personal gain.

The same is true of senior managers and board members who begin to give themselves bonuses from the company’s earnings. The drive to maximize bonuses distract from the corporate aims, and when shareholders will not sack managers and board members who are lining their own pockets at the expense of the shareholder, then the managers can run amuck.

That is what happened in our banks. Barclays’ shares for example sank by a half over several years when top managers in most banks lifted their own compensation, including bonuses, by obscene amounts, and shareholders let them get away with it. Needless to say, the holders of large blocks of shares, able to sway any shareholders’ meeting, are often themselves large banks and city institutions, so effectively they are in a scam to rob the ordinary small shareholder and the customers.

Politicians are the same. Their objective is supposed to be to represent the interests of the people who vote for them, but they are all too easily distracted by the wads of maney waved at them from corporate bosses. Tony Blair is getting his compensastion now for his sacrifice of pretending to be a Labour Party Prime Minister, when he was a Republican Quisling. The incentives of the rich soon make most career politics forget what they are there for.

Our societies used to take an extremely dim view of bribery, but no longer. Bribes are today incentives, and the law enforcers themselves are too ready to accept them. A cabal of superrich people have corrupted the western world beyond redemption. Western society is decadent and immoral. Democracy is superficial. We are run by this megarich class, which controls every party with its incentives, incentives to do as they want, and not what is good for society.

The often despised Arabs are showing more courage and awareness now than the once militant workers of the UK and France. Workers in the US have always been too easily fooled by their betters. Even after thirty years of declining real wages, longer hours and poorer conditions for those in work, and a labor pool of twenty or thirty million unemployed or part time workers, while the top thousand or so people have trebled their wealth, the average American is still beguiled by the moribund American dream, Republican crooks and pastors, and their own inability to comprehend what is going on. They are the ones without the incentives, but rather are offered carrots.

Carrots might be incentives for donkeys, but Americans ought to be more sophisticated than those famously uncomplaining beasts of burden. Its time they started to do what the Arabs have already begun. Get out in mass on to the streets, trash a few corporate HQs and banks, and threaten revolution. Social instability is one thing the rich do not like, and can do little about, except getting national guards to shoot citizens.

Then everyone will realize that the state is not theirs, and democracy is an illusion.

Cooperation and Monitoring to Deter and Punish Free Loading Works Best

The default assumption of evolution is that each individual animal follows only its own interests, and so cooperation in more than small groups is impossible because free riders take advantage of the others to enjoy the benefits without contributing anything, or as much, to the joint venture. Yet, human beings do cooperate, and field studies show that many communities are able to manage their commons—woodland, pasture, fishing. They manage to do it by combining a degree of cooperation with monitoring free riders to deter them.

Researchers, Professor Michael Kosfeld, Devesh Rustagi and Professor Stefanie Engel, studied a forest commons management program of pastoralists in Ethiopia. They recorded the degree of conditional cooperation in a group—the proportion of members willing to cooperate provided that others cooperate too. They found that groups differ widely in their share of conditional cooperators, from 0 percent to 88 percent. When conditional cooperators were a small proportion, not surprisingly, many were free riders. Presumably, this amounted practically to free exploitation of the resources.

Statistical analysis showed that the groups with more conditional cooperators were more successful in managing their forests, as measured by the number of immature trees there were per hectare. Looking into this further, the researchers investigated what the groups actually did to guard against free riding. They measured the time spent in monitoring the forest.

Groups with more conditional cooperators not only cooperated more but also monitored more by patrolling the forest to detect and deter free riders. With 60 percent conditional cooperators, a group spent on average 14 hours more per month monitoring than a group without any conditional cooperators. It shows that conditional cooperators spend time not just helping each other but also trying to stop free riders. Professor Kosfeld said:

Our findings fill a long standing gap between field and laboratory studies on human cooperation.

A positive correlation between conditional cooperation and costly monitoring sheds light on the evolution of human cooperation. The theory of gene culture evolution predicts greater cooperation in groups which enforce cooperation by deterring or punishing free riders. Rustagi explained:

The results yield important policy implications for the governance of human collective action. Because humans differ in their motivation to cooperate, an effective solution to commons problems should not be based on incentives for purely self regarding individuals alone but needs to explicitly take into account the complex interplay of heterogeneous motivations and behavioral norms to cooperate voluntarily.

This circumlocution must mean that free riders ought to be deterred from having the benefits of the cooperation of others or somehow punished for it. What can that mean in our modern societies, however? Are the so called benefit scroungers to have their benefits withheld, as the UK Con-Dem government are threatening, so that they have to starve, beg or turn to thieving to live? Or do the cooperators accept that people who are willing or are only able to live at a sustenance level nevertheless have the right to life without being starved to death. Earlier human societies always let the poor, aged, and disabled use common heath land, and a commandment in the Jewish scriptures (the Old Testament of the Christians) was to leave a portion of a field to be picked by the poor. No decent society has ever let people starve in the midst of surplus.

Does it mean then that the very rich, who pay others to do their work and are able to do so by taking much more than their fair share of society’s output, should be punished for being greedy and selfish while others have to work for their share? These wealthy people surely are the latter day free riders of our society. Mostly, they have done nothing themselves to advance society. They are where they are because some relative, a father, grandfather or perhaps uncle, who did something useful and successful, have left them with money and possessions that they have never earned themselves, but yet that they insist is rightfully their own, or nowadays by voting themselves huge compensation packages and bonuses. They are the free riders of today, and they are the ones who should be rightfully punished by society.

By far the easiest way to punish them, and to allow the ones in society who do the work to benefit, is to tax the rich at a suitably punitive level, and to distribute the money in social wages, that is to say, better social services like health and education, services that everyone in a decent society should expect to get free when they need it. Everyone will be freely educated when they are young, will be freely treated when they are ill or injured, and will be freely cared for as old people.

That is a society in which cooperation works, in which the real scroungers, the free loading rich are benignly punished by removing some of their unearned wealth and giving it to the poor who at present cannot afford many of the basic things in life. It has the benefit for the wealthy too, the people who still own the factories and banks, of letting people consume, for it is out of consumption that the free riders take their surpluses. A proper civil society is called civilization, and harks back to the sort of societies we used to have albeit on a smaller scale. It is human and humane. Let’s do it.