This is a revision of game theory which takes account of agents' own descriptions of their situations, and which allows people to reason as members of groups.

Understanding more about how the brain functionsshouldhelp us understand economic behaviour. But some would have us believe that it has done this already, and that insights from neuroscience have already provided insights in economics that we would not otherwise have. Much of this is just academic marketing hype, and to get down to substantive issues we need to identify that fluff for what it is. After we clear away the distractions, what is left? The answer is that a lot is (...) left, but it is still all potential. That is not a bad thing, or a reason to stop the effort, but it does point to the need for a serious reconsideration of what neuroeconomics is and what passes for explanation in this literature. I argue that neuroeconomics can be a valuable field, but not the way it is being developed and “sold” now. The same is true more generally of behavioural economics, which shares many of the methodological flaws of neuroeconomics. (shrink)

Second, this collection of cognitive programs evolved in the Pleistocene to solve the adaptive problems regularly faced by our hunter-gatherer ancestors-...

Human cooperation is held to be an evolutionary puzzle because people voluntarily engage in costly cooperation, and costly punishment of non-cooperators, even among anonymous strangers they will never meet again. The costs of such cooperation cannot be recovered through kin-selection, reciprocal altruism, indirect reciprocity, or costly signaling. A number of recent authors label this behavior ‘strong reciprocity’, and argue that it is: (a) a newly documented aspect of human nature, (b) adaptive, and (c) evolved by group selection. We argue exactly (...) the opposite; that the phenomenon is: (a) not new, (b) maladaptive, and (c) evolved by individual selection. In our perspective, the apparent puzzle disappears to reveal a biological and evolutionary logic to human cooperation. Group selection may play a role in theory, but it is neither necessary nor sufficient to explain human cooperation. Our alternative solution is simpler, makes fewer assumptions, and is more parsimonious with the empirical data. (shrink)

"This book is a sorely needed corrective. Animal Spirits is an important--maybe even a decisive--contribution at a difficult juncture in macroeconomic theory.

Natural Justice is a bold attempt to lay the foundations for a genuine science of morals using the theory of games. Since human morality is no less a product of evolution than any other human characteristic, the book takes the view that we need to explore its origins in the food-sharing social contracts of our prehuman ancestors. It is argued that the deep structure of our current fairness norms continues to reflect the logic of these primeval social contracts, but the (...) particular fairness norm a society operates is largely a product of cultural evolution. In pursuing this point, the book proposes a naturalistic reinterpretation of John Rawls' original position that reconciles his egalitarian theory of justice with John Harsanyi's utilitarian theory by identifying the environment appropriate to each. (shrink)

In this article, I critically respond to Herbert Gintis's criticisms of the behavioral-economic foundations of Ken Binmore 's game-theoretic theory of justice. Gintis, I argue, fails to take full account of the normative requirements Binmore sets for his account, and also ignores what I call the ‘scale-relativity’ considerations built into Binmore 's approach to modeling human evolution. Paul Seabright's criticism of Binmore, I note, repeats these oversights. In the course of answering Gintis's and Seabright's objections, I clarify and extend Binmore (...) 's theory in a number of respects, integrating it with Kim Sterelny's and Don Ross's recent work on the evolution of people as cultural entities. The account also yields a novel basis for choosing between socialism and what Binmore calls ‘whiggery’ as normative political programs. Key Words: theory of justice • bargaining theory • evolutionary game theory • human evolution • Ken Binmore • Herbert Gintis • Kim Sterelny. (shrink)

Our paper “Experimental Economics: Where Next?” contains a case study of Ernst Fehr and Klaus Schmidt’s work in which it is shown that the claims they make for the theory of inequity aversion are not supported by their data. The current issue of JEBO contains two replies, one from Fehr and Schmidt1 themselves, and the other from Catherine Eckel and Herb Gintis. Neither reply challenges any claims we make about matters of fact in our critique of Fehr and Schmidt on (...) inequity aversion, although it is clear that if they could have refuted any single factual sentence then they would have done so. Both replies therefore implicitly concede that the facts quoted in our case study are correct. All the other issues raised in the two replies are just so much dust kicked up to distract attention from the only question that matters: Is it scientific to proceed like Fehr and Schmidt or is it not? Fehr and Schmidt say yes. So do Eckel and Gintis. The implications are quite far-reaching for those like us who think it is obvious that the answer is no. What other claims asserted by the school of Gintis et al can we trust? (shrink)

If some external enforcement agency compels us to honor deals reached in the original position, then Harsanyi has shown that the outcome will be utilitarian. Under the same hypotheses, Rawls claims that the outcome will be egalitarian. This chapter confirms that Harsanyi is correct. It goes on to use the concept of an empathy equilibrium to predict the standard of interpersonal comparison needed to operate a utilitarian norm that will evolve in the medium run.