Adam Smith, The Theory of Moral Sentiments (1759, p.47)
Introduction
A million little incidents happen every day when people make choices that are not in their interest-for the sake of family, friends or even complete strangers. Be it in the drudgery of everyday life or in the face of mortal danger, humankind bands together instead of tearing apart. Economic theory treats economic gain as the primary human motive (1), but such unselfish behaviour is widespread and the norm- millions of units …show more content…
Sometimes agents return moves in kind, even when these actions are costly without present or future benefits for the reciprocator (Gintis, 2000). This conditional behaviour is called strong reciprocity. Though strong reciprocity applies to both direct and indirect reciprocity, there is very little evidence for strong indirect reciprocity. Social indirect reciprocity has been experimentally analyzed using the helping game (Nowak and Sigmund, 1998) with decisions affected by past behaviour of players leading to the creation of an image score. Though agents strategically give more to increase their reputational standing (Engelmann and Fischbacher, 2002), donors also are more likely to give to players who have given in the past (Bolton, 2005), in fact providing recursive information further promotes …show more content…
the precision of the signal. Player Ai will update his prior belief and choose Player Bi . The closer µ is to 1, the more precise δ is, implying S is a true representation of reality.
Conclusions, implications and further work Given that no Player Ai will know for certain which Player Bi to donate to, Player Bi will need to increase the precision of image score S through providing more information to donors in terms of number of beneficiaries that have received aid. Greater the amount of information that is publicly available, larger the amount of future donations that can be acquired. Word-of-mouth, number of supporters on social media, prominent advertisements citing number of people helped and the monetary values involved can increase the donations received. Spending for publicity can be justified for