In order to achieve a sustainable economy, policy-makers have many instruments at their disposal. They can impose taxes on consumption and/or production, propose regulations and laws, and they can inform consumers and producers about environmental consequences of their behaviors. Economics research is often used to design such polices.
Evidently, the predictive power of economic models depends on the assumptions made regarding what drives human behavior. Economics traditionally takes individuals’ motivations – their preferences – as given, and most of the time those preferences are assumed to express pure material self-interest, or Homo oeconomicus. But if preferences are inherited from past generations, what are their evolutionary foundations? More specifically, what preferences have survival value in a given society. Should we expect pure self-interest, altruism, inequity aversion, spite, some form of moral motivation, or something else?
The answer to this question is of great importance for environmental economics and sustainability. Should one use Homo oeconomicus as a representation of human motivation when analyzing environmental externalities, the effects of taxation and/or regulation? Or should one assume that people, at least to some extent, care about the environmental externalities of their actions? This question is at the heart of the literature on preference evolution, a literature to which professors Jörgen Weibull, at the economics department of the Stockholm School of Economics, together with professor Ingela Alger, at the Toulouse School of Economics and the Institute for Advanced Study in Toulouse, have contributed in recent years. They have shown that evolution favors a class of social/moral preferences, the carriers of which they call Homo moralis.
More precisely, they have developed a theoretical model framework for analysis of the evolutionary foundations of human preference formation in strategic interactions between individuals. In this framework, individuals are matched to form groups of a given finite size and to play a symmetric game with material payoffs. Each individual is endowed with preferences over how to act in the interaction at hand. Each individual’s preferences are his or her private information. A preference is evolutionarily stable if individuals endowed with that preference, the residents, fare better in material terms than rare mutants, individual endowed with other preferences, if the latter would suddenly appear in the population. Material outcomes are evaluated in the associated equilibrium states, in which all individuals act according to their own preferences.
A key feature of this model is that it allows the matching into groups to be statistically assortative in the sense that rare mutants may be more likely than residents to meet other rare mutants. Such assortativity arises if (a) individuals tend to interact with individuals in their geographic, cultural, linguistic or socioeconomic vicinity, and (b) mutations tend to first spread locally.
This research program has resulted in a series of publications, both in economics and in biology. These studies are centered around two main results. First, evolution turns out to favor a particular type of social or moral preferences, preferences that attach some weight to the individual’s own material payoff, but also to what material payoff she would obtain if, hypothetically, if others would act like she. The latter component can be interpreted as an expression of Immanuel Kant’s categorical imperative, namely, to "act only according to that maxim whereby you can, at the same time, will that it should become a universal law" (Kant, 1785).
The second main result is that all preferences that induce behaviors distinct from those of Homo moralis are evolutionarily unstable, in the sense that there exist mutant preferences that, if entering in small population shares, will materially outperform the residents.
Interestingly, Homo moralis preferences are new to the economics discipline. Indeed, while a variety of preferences, deviating from those of Homo oeconomicus, have been proposed and analyzed in the economics literature over the past 25 years, this particular class of preferences has not appeared in the economics literature before.
The implications for economic analysis, if Homo oeconomicus is replaced by Homo moralis, are quite striking for some interactions. In particular, in public goods provision, and in situations of the “tragedy of the commons” type, as well as in environmental economics more generally, Homo moralis may, unlike Homo oeconomicus, take actions that, although costly in terms of own material payoffs, provide more public goods and are less harmful to the environment. Importantly, they may do this even if the effects of the individual’s actions are negligible. The reason is that the moral component is deontological in nature; it triggers the individual to "do the right thing", to act in a way that it would like others to do in the given situation. Because of the deontological nature of this component, information about environmental consequences may affect the behavior of Homo moralis (but not Homo oeconomicus), even in situations when individual behavior has negligible effects on the environment.
Together with other researchers professors Alger and Weibull are currently carrying out laboratory experiments with human subjects to shed light on human motivation, and to investigate whether traces of Homo moralis can be found in the data. They also carry out interdisciplinary research with theoretical biologists in order to integrate their methodologies.
More about this research project can be found on their personal web sites:
Ingela Alger: https://www.tse-fr.eu/people/ingela-alger/
Jörgen Weibull: https://sites.google.com/site/joergenweibull/