Voluntary Interaction and the Principle of Mutual Benefit

Wed, 12/01/2021 - 12:00 / 13:00

405, Viale Romania

Speaker: Andrea Isoni , Warwick Business School

Authors: Andrea Isoni, Robert Sugden, Jiwei Zheng

Abstract

Most social preference theories are based on observations of non-voluntary interactions.  Non-selfish behaviour may take fundamentally different forms in voluntary interactions, such as market transactions.  We investigate the Principle of Mutual Benefit – an injunctive norm requiring individuals who enter interactions voluntarily to conform to common expectations about behaviour within them.  This norm induces patterns of behaviour inconsistent with existing social preference theories, and allows extrinsic incentives to crowd in trustworthiness.  We embed this in a model consistent with evidence about promise-keeping, gift exchange, and ‘avoiding the ask’.  A new experiment finds support for many of the model’s predictions about voluntariness.