Altruistic twist in market economies

Democratic societies with market economies have a reputation as cauldrons of competition, materialism, and greed. There’s another side to that coin, though. These societies also foster cooperation among strangers in order to achieve a common financial goal, say economist Benedikt Herrmann of the University of Nottingham, England, and his colleagues.

In contrast, nondemocratic and other societies without market economies—marked by low civic involvement and distrust of public authorities—promote an ethic of punishing strangers who demand cooperation in a joint economic effort, Herrmann’s group reports in the March 7 Science.

The researchers studied 273 college students from 15 countries as they played a “public goods” game. Each of four anonymous players could contribute any number of 20 tokens to a public account. That account was then multiplied by 1.6 and divided evenly among the players. This process was repeated 10 times. At that point, volunteers exchanged tokens for money.

After each round, everyone’s contributions were revealed and players could punish those who gave too little by taking away three of their tokens. This action cost the punisher one token.

Volunteers from democratic, market-based societies—including the United States, England, and Germany—usually increased their contributions after punishment, thus boosting group earnings. In these societies, people reprimanded for low contributions felt guilty for letting down anonymous partners and thus became more cooperative, the researchers suggest.

Participants from traditional and nondemocratic societies—such as Saudi Arabia, Greece, and Russia—often responded to punishment by taking tokens away from high contributors in ensuing rounds. That led everyone to stop contributing to the public account. Such societies champion personal sacrifice on behalf of family and friends, so punishment by well-intentioned strangers elicited anger followed by revenge, the investigators propose.