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«Universidade Federal de Viçosa Departamento de Economia Rural WORKING PAPERS IN APPLIED ECONOMICS FEAR OR GREED? DUTY OR SOLIDARITY? MOTIVATIONS AND ...»

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Universidade Federal de Viçosa

Departamento de Economia Rural

WORKING PAPERS

IN APPLIED ECONOMICS

FEAR OR GREED? DUTY OR SOLIDARITY?

MOTIVATIONS AND STAGES OF MORAL

REASONING: EXPERIMENTAL EVIDENCES

FROM PUBLIC-GOODS PROVISION DILEMMAS

Leandro F. F. Meyer e Marcelo J. Braga WP - 05/2009 Viçosa, Minas Gerais Brazil Fear or Greed? Duty or Solidarity?

Motivations and Stages of Moral Reasoning: Experimental Evidences from Public-Goods Provision Dilemmas Leandro F. F. Meyer∗ Socio-Environmental Institute, Federal Rural University of the Amazon Belém-PA, Brazil Marcelo J. Braga Department of Agricultural Economics, Federal University of Viçosa Viçosa-MG, Brazil Abstract As economists increasingly recognize the limits of the canonical self-interest assumption, the lack of a theory of human valuation that clearly specifies what determines an individual’s utility judgments renders the prediction of behavior in social dilemmas virtually impossible. In this study, we examined the explanatory power of a structuralist-constructivist theory of adult development and this theory’s analytical significance to the understanding of behavioral diversity in situations where individual and collective interests collide. Experimental results suggest that the theoretical constructs built into the selected theory provide a reliable basis for predicting participants’ behavior when presented with two different collective-action dilemmas under diverse institutional conditions.

JEL classification: C72; C92; D74 Keywords: social dilemmas; experimental economics; sociocognitive and moral reasoning; adult development ∗ Corresponding author Leandro Frederico Ferraz Meyer Universidade Federal Rural da Amazônia Avenida Presidente Tancredo Neves, Nº 2501 66.077-530 Caixa Postal: 917 Phone: (55)(91) 3210-5140 / 3272-7228 webmaster@ufra.edu.br leandro.meyer@ufra.edu.br / lffmeyer@terra.com.br

1. Introduction Although a fully articulated, general theory of the affect institutional incentives have on individuals and their behavior in collective-action situations has not been developed, there is growing consensus among those social and political scientists focused on social dilemmas that the conventional economic theory of externalities is a special case of a more general theoretical structure (Ostrom, 2007; Frohlich & Oppenheimer, 2001).

Clearly, the essence of social dilemmas, such as the appropriation of a commonpool resource or the provision of a public good, is inseparable from the existence of market externalities and the inherent payoffstructure. These dilemmas often embroil an individual in a decision situation where his interests and the group’s interests collide.

Without questioning the generalisability of the economic postulate of rationality, conventional theory considers that the individual facing this type of conflict is trapped in the “inherent logic” of the situation (Hardin, 1968). Accordingly, these individuals are said to be facing a “social dilemma:” they would all be better off if they found a way to cooperate, but there is no incentive for the individual to bear the costs of cooperation (Ostrom, 2007).1 As a result, conventional theory repeatedly advocates that institutions designed to prevent the “tragedy of the commons” should first address the fundamental problem of property rights––whether public or private––and second be aware that regulations often must be imposed by external authorities acting in the public interest, assuming that these authorities can devise the proper institutions (Ostrom, 2007).

Basically, a rule to cooperate to solve the dilemma has the character of a public good: the entire community benefits from that rule, whether they contribute for its provision or not. Under the assumption of self-interest, this rule creates a second-level, same-type dilemma on-top of the initial dilemma, which is inconsistent with the conventional theory that the same “helpless” participants, trapped by the inherent logic of the commons, solve a second-level dilemma in order to address the first-level dilemma.

Scholars have learned that problems of overharvesting and the misuse of ecological systems are rarely due to a single cause (Ostrom, 2005). Field and laboratory research focused on social dilemmas have shown that individuals’ behaviors in these situations are affected not only by the structural characteristics of the outcomes but also by the structural characteristics of the group (size, leadership, inter-communication), and the specific content or context of the dilemma (investments, social events, environmental issues) (Kollock, 1998; Komorita & Parks, 1995; Kopelman et al., 2002;

Lepyard, 1995; Van Lange, Liebrand, Messick, & Wilke, 1992; Ostrom, Gardner & Walker, 1994; Poppe, 2005).

Much of the research about social dilemmas has been focused on the identification of sets of variables that act to mitigate social losses associated with conflicts between the individual and the collective in the face of externalities (Ostrom 1990; Schlager 1994; McKean 1992, 2000; Tang 1994; Ostrom et al. 1994; Wade 1996;





Baland & Platteau 1996; Agrawal 2001). The puzzle is that these structural and contextual variables also interact with the characteristics of the individuals involved, so that different individuals may respond differently to objectively similar incentive structures and contexts of action: different individuals often have different attitudes towards existing information, perceived uncertainly and risk, inter-communication, and authoritarian figures.

The implications of an individual’s attributes are particularly important in social dilemma situations because of the essentially moral nature of the choices that must be made when individual and collective interests collide.2 Due to the moral nature of many social dilemmas, the aprioristic notion that all preferences are self-centered, as the As Heath (2007) indicates, while there are many aspects of morality that are puzzling, perhaps the most puzzling is that it often requires us to act in ways that are contrary to our self-interest. “We may find ourselves wanting something, but feeling that morality prohibits us from doing what is necessary to obtain it. Morality therefore presents itself to us in the form of a duty to refrain from the pursuit of individual advantage, or to use the more technical term, in the form of a deontic constraint.” standard theory postulates, does not provide adequate explanatory depth. By implicitly equating utility with profits and rationality with self-interest, one actually dismisses the need to understand how individuals reach utility judgments. While this might be a reasonably scholarly strategy for modeling behavior in highly competitive market settings, as Ostrom (2005) puts it, it is not so when addressing most social dilemmas.

These situations often evoke the participants’ internal values, which may not be monotonically related to the objective payoff (ibid, Gintis, 2000; Camerer, 2003).

Once it is recognized that intrinsic values matter when addressing morally relevant conflicts of action, one must then realize that the situation is one of incomplete information: one agent cannot know exactly how other agents are valuing alternative actions and outcomes (Ostrom, 2005). Finally, conventional risk analysis cannot adequately determine the effect of institutionally sponsored incentives on the successful resolution of a social dilemma, for how does one accurately discount individual morality, but must be expanded to include the application of discrete rules of thumb or heuristics (cf. Heiner, 1983).

This is possibly why Ostrom (2005) suggests that the major theoretical challenge facing those studying today’s social dilemmas is the development of an appropriate family of assumptions regarding the intrinsic values individuals place on actions and

outcomes––particularly outcomes obtained with others:

–  –  –

We suggest that the constructivist-structuralist conception of human development has led to theories and findings of great relevance to our understanding of human valuation; and as this understanding improves, so does our ability to construct institutions that better resolve social dilemmas. A central tenet of developmental psychology is that to produce the expected results, the incentive structure should be tuned to the characteristics of each psychosocial centralization stage, as motivational needs, aims, and means differ between each stage. The substantive significance of a developmental framework to the resolution of social dilemmas is emphasized by the growing consensus among developmental psychologists that (i) psychological development is not upper-bounded, i.e., it is not limited to the childhood and adolescence, as traditionally assumed, and (ii) open-ended, multi-stream, complex interior growth is a process that involves a continuing decline in egocentrism, increasing autonomy and an increasing ability to take other people, places, and things into account when making decisions that affect the well-being of others (Wilber, 2000, 2001; cf. also Commons, 1981, 2000).

The broad study seeks to explain and predict behavior in collective action situations using alternative theories and models of adult development. This paper is rooted in the constructs of a selected developmental theory; one that is particularly suited to the examination of behavior in situations where individual and the collective interests collide.

We began by assessing the psychosocial profiles of 322 Brazilians who were potential participants in three experiments: a laboratory common-pool resource appropriation dilemma, including communication and sanctioning conditions, a stepwise public-goods provision dilemma with variable levels of required contribution, and the standard Ultimatum game. We carried out factor analysis on data from the initial psychosocial survey of the experiments’ participants to pretest the cross-cultural robustness of the theoretical constructs set in the chosen developmental model. The procedure resulted in three quite meaningful principal factors, which represented three principal psychosocial centralization stages present in our sample. The participants’ behaviors in the different experimental situations were then analyzed statistically to find out whether they conform with a set of theoretical expectations derived from Graves’s theory, as well as with the general features of human internal development (declining egocentrism, increasing autonomy, increasing awareness). Experimental results suggest that the theoretical constructs built in the chosen developmental model provide a reliable basis for predicting behavior in the situations we examined and that a greater willingness to cooperate is indeed associated with higher stages of psychosocial development. In this paper we summarize the results from the public-good game (PGG) experiment. Results from the common-pool resource (CPR) experiments can be found in Meyer and Braga (2009). The conjunct of all experimental results is reported in Meyer (2006).

The following section briefly outlines Clare Graves’s “Emergent Cyclical Levels of Existence Theory” (Graves, 1970, 2005). The paper continues with a summarization of the methods and procedures used in this study. It then puts forward our hypotheses, presents and analyzes results from the experiments, and closes with our conclusions and a discussion of the study’s policy implications.

2. The biopsychosocial waves of agency and communion, Graves’s theory postulates that the biopsychosocial development of human beings arises from the interaction of a double-helix complex of two sets of determining forces: environmental social determinants and the organism’s neuropsychological survival equipment. After about a decade of careful empirical research, Graves (1970) conceptualized eight emergent stages, or waves, of interior growth in adult humans.

These stages are states of biopsychosocial equilibrium, comprised of a perception of the environment and a reciprocal neurochemical balance, and are reflected in a social construction that then influences the mental equilibrium. In Graves’s words,

–  –  –

Graves’s sweeping statement is subject to the currently accepted understanding that most of the multiple lines or streams of consciousness that comprise human interiority makeup decomposable subsystems that develop in a relatively independent fashion (Wilber, 2001, p. 44). As a result, a person can be very advanced in some lines, medium in others, and low in others––all at the same time. Hence, it is not quite appropriate to talk about general “levels of existence” as no sequential development can possibly be devised when considering the sum total of all these different lines.

However, as Wilber (2001) reports, “the bulk of research has continued to find that each developmental line itself tends to unfold in a sequential, holarchical fashion,” meaning (i) that higher stages in each line tend to build upon or incorporate the earlier stages of that line, (ii) that no stage can be skipped, and (iii) that the stages emerge in an order that cannot be altered by environmental conditioning or social reinforcement.

With these caveats and core ideas in mind, the special significance of Graves’s theory to our understanding of the interplay among cognition, values, and institutions in collective-action settings is rooted in the very structure and focus of his model. The substance of Graves’s constructs resides on revealing the different sets of values individuals place on actions and outcomes affecting others’ well-being. Graves’s model puts forward the notion that people tend to oscillate between two fundamental stances, between “me” (agency) and “we” (communion) (Cowan & Todorovic, 2005).

According to Graves’s model, this cyclical turn produces two basic behavioral systems, express-self systems and sacrifice-self systems (Table 1), which have manifest implications for the analysis of conflicts between individual and collective interests.



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