Reciprocity and Welfare
The “prisoner’s dilemma” game undertaken by Robert Axelrod at the University of Michigan requires each of two players to choose simultaneously one of two actions, “cooperate” or “defect.” The way the payoffs work is that both players do better by cooperating than defecting, but whatever one player does, the other player does better by defecting. For example, the payoff to mutual cooperation is 10 for each, the payoff to mutual defecting is 5 for each, but the payoff to defecting when the other player cooperates is 15 for the defector and 0 for the cooperator. The iterated prisoner’s dilemma is simply repeated play of the game with “winners” being those with high cumulative scores over however many rounds are played.
Axelrod asked a number of game theorists, economists, political scientists, sociologists, and psychologists to submit computer programs giving complete strategies for playing the game successive rounds of which were repeated with the same partner. Each program was pitted against every other program, as well as itself and a program that randomly chose to cooperate and defect. The winning strategy (submitted by game theorist Anatol Rappoport), called tit-for-tat, was the simplest. Tit-for-tat cooperates on the first round, and then does whatever its partner did on the previous round.
Tit-for-tat has three attributes essential for cooperation. (1) It’s nice: it begins by cooperating, and it is never the first to defect. (2) It’s punishing: it retaliates relentlessly once the other party defects. (3) It’s forgiving: as soon as a defecting partner returns to cooperating, tit-for-tat does the same.
In the “ultimatum game” one subject is the responder, the other the proposer. The proposer is provisionally awarded an amount (”the pie” — typically $10) to be divided between proposer and responder. The proposer offers a certain portion of the pie to the responder. If the responder accepts, the responder gets the proposed portion, and the proposer keeps the rest. If the responder rejects the offer both get nothing. In experiments conducted in the United States, Slovakia, Japan, Israel, Slovenia, Germany, Russia, and Indonesia, the vast majority of proposers offer between 40% and 50% of the pie, and offers lower than 30% of the pie are often rejected. These results have occurred in experiments with stakes as high as three months’ earnings.
In an n-player public goods experiment ten players are given $1 in each of ten rounds. On each round, each player can contribute any portion of the $1 (anonymously) to a “common pool.” The experimenter divides the amount in the common pool by two, and gives each player that much money. If all ten players are cooperative, on each round each puts $1 in the pool, the experimenter divides the $10 in the pool by two, and gives each player $5. After ten rounds of this, each subject has $50. By being selfish, however, each player can do better as long as the others are cooperating. By keeping the $1, the player ends up with “his” $10, plus receives $45 as his share of the pool, for a total of $55. If everyone is selfish, however, then no one gives to the pool, and each receives only $10.
In such experiments, only a small fraction of players contribute nothing to the common pool. In the early stages of the game, people generally contribute half their money to the pool. In the later stages of the game, contributions decay until at the end, they are contributing very little. The economist James Andreoni suggests that cooperation decays because public-spirited contributors want to retaliate against free-riders and the only way available to them in the game is by not contributing themselves. If players are permitted to retaliate directly against non-contributors, but at a cost to themselves, they do so. In this situation, contributions rise in subsequent rounds to near the maximal level.
Communication among participants prior to the game, or experimental conditions that reduce the subjective “social distance” among participants, lead to higher and more sustained levels of generosity and cooperation.
We can generalize from these and similar experiments that: (1) People exhibit significant levels of generosity, even towards strangers. (2) People share more of what they acquire by chance rather than by personal effort. (3) People contribute to public goods and cooperate in collective endeavors, and consider it unfair to free-ride on the contributions and efforts of others. (4) People punish free riders at substantial costs to themselves, even when they cannot reasonably expect future personal gain from doing so. (5) Each of these aspects of reciprocity becomes more salient when the social distance participants perceive among themselves is smaller.
In an unpublished paper studying a 1990 sample of the General Social Survey, Christina Fong found that only 18% of respondents who cited “lack of effort by the poor themselves” as a reason for poverty thought “too little” was spent on welfare, while 49% thought that “too much” was being spent. In contrast, among those who thought that lack of effort was “not important,” 44% thought that we were spending too little on welfare, compared to 28% for “too much.” Fong found that a belief that effort is important to “getting ahead in life” has a considerably larger impact on opposition to aiding the poor than does one’s income, years of schooling, and parents’ socioeconomic status combined.
Fong found that statistically controlling for race, schooling, income, religion and other variables, the self-employed tend to oppose such policies, and that much of their opposition is statistically associated with a belief that individual effort makes a difference in getting ahead. In his forthcoming Why Americans Hate Welfare, political scientist Martin Gilens notes that during recessions people are less likely to explain poverty by “lack of effort by the poor,” and more likely to support egalitarian programs.
Steve Farkas and Jean Robinson (The Values We Live By) note that, by more than four to one, Americans say the most upsetting thing about welfare is that “it encourages people to adopt the wrong lifestyle and values,” not that “it costs to much tax money.”
68% said (59% of welfare recipients) that welfare is “passed on from generation to generation, creating a permanent underclass.”
70% (71% of welfare recipients) said welfare makes it “financially better for people to stay on welfare than to get a job.”
57% (62% of welfare recipients) think welfare encourages “people to be lazy” and 60% (64% of welfare recipients) say the welfare system “encourages people to have kids out of wedlock.”
Whites were much more likely than African Americans to attribute negative attributes to welfare recipients, and much more likely to blame an individual’s poverty on lack of effort. The survey data show that whites’ race-based opposition to welfare stems from the specific perception that, as a group, African Americans are not committed to the work ethic.
The U.S. public strongly supports income support measures when asked in ways that make clear the deserving nature of the poor: a 1995 CBS/New York Times poll found that twice as many agreed as disagreed that “it is the responsibility of the government to take care of people who can’t take care of themselves.”