Econometrica: Nov 2013, Volume 81, Issue 6
Homo Moralis—Preference Evolution Under Incomplete Information and Assortative Matching
Ingela Alger, Jörgen W. WeibullWhat preferences will prevail in a society of rational individuals when preference evolution is driven by the resulting payoffs? We show that when individuals' preferences are their private information, a convex combination of selfishness and morality stands out as evolutionarily stable. We call individuals with such preferences . At one end of the spectrum is , who acts so as to maximize his or her own payoff. At the opposite end is , who does what would be “the right thing to do,” in terms of payoffs, if all others would do likewise. We show that the stable degree of morality—the weight placed on the moral goal—is determined by the degree of assortativity in the process whereby individuals are matched to interact.
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