Paradoxical Effects of Social Behavior Essays in Honor of Anatol Rapoport

Paradoxical Effects of Social Behavior Essays in Honor of Anatol Rapoport

Edited by Andreas Diekmann and Peter Mitter

With Contributions by G. Arminger, K. E. Boulding, s. 1. Brams, 1. S. Coleman A. Diekmann, R. Dinkel, C. Donninger, H. Esser D. S. Felsenthal, O. Hagen, R. Hardin, 1. C. Harsanyi M. 1. Holler, L. Kern, E. Kobler,'W. Leinfellner, S. Lindenberg, Z. Maoz, P. Mitter, K.-D. Opp H.-G. Rader, W. Raub, A. Schotter, R. A. SchuBler M. Shubik, T. Voss, 1. Weesie, R. Wippler

With 35 Figures

Physica-Verlag Heidelberg Wien

Dr. ANDREAS DIEKMANN, Institut fUr Soziologie der Ludwig­Maximilians-Universitiit Miinchen, KonradstraBe 6, 8000 Miinchen 40, FRG

Dr. PETER MITTER, Leiter der Abteilung fUr Mathematische Methoden und Computerverfahren des Instituts fUr Hahere Studien, Stumpergasse 56, W60 Wien, Austria

ISBN-13: 978-3-7908-0350-1 e-ISBN-13: 978-3-642-95874-8 DOl: 10.1007/978-3-642-95874-8

CIP-Kurztitelaufnahme der Deutschen Bibliothek

Paradoxical effects of social behavior: essays in honor of Anatol Rapoport I ed. by Andreas Diekmann and Peter Mitter. - Heidelberg; Wien: Physica-Verlag, 1986. -ISBN-13: 978-3-7908-0350-1 NE: Diekmann, Andreas [Hrsg.].; Rapoport, Anatol: Festschrift

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© by Physica-Verlag Heidelberg 1986 Softcover reprint of the hardeover 1st edition 1986

The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.

Cover: Erich Kircher, Heidelberg

712017130-543210

To Anatol Rapoport on his seventy-fifth birthday

SELECTED BIBLIOGRAPHY OF ANATOL RAPOPORT

Anatol Rapoport was born May 22nd , 1911 in Lozovaya (Russia). He went to school in Chicago and afterwards studied music in Vienna from 1929 to 1934. Until 1937 he was active as an international concert pianist. He began a se­cond study in mathematics at the University of Chicago (Ph.D. in mathematics 1941). After military service Rapoport started his scientific career at the Illinois Institute of Technology, Chicago, in 1946. He then was devoted to research in mathematical biology at the University of Chicago where he worked together with N. Rashevsky. From 1955 to 1970 Rapoport was professor at the Mental Health Institute of the University of Michigan. In 1970 he transferred as a pro­fessor of psychology and mathematics to the University of Toronto. He became the director of the Institute for Advanced Studies, Vienna in 1980. Rapoport moved back to Canada in 1984 where he now is a professor at the University of Toronto and president of the society "Science for Peace".

Rapoport received the "Lenz International Peace Research Prize" in 1976. He was guest-professor in Austria, Denmark, Germany, Japan and other coun­tries, editor or co-editor of General Systems, Journal of Confiict Resolution, Be­havioral Science, ETC - A Review of General Semantics, and he is a member of scientific societies like American Mathematical Society, Society for Mathematical Biology, Society for General Systems Research etc.

He published about 400 contributions to semantics, mathematical biology, systems theory, game theory, mathematical social sciences, and peace research. His books and writings were translated to many languages. The following se­lected bibliography includes the first editions of Rapoport's books in english language.

1950 Science and the Goals of Man. New York: Harper & Row. (Japanese edition 1965)

1953 Operational Philosophy. New York: Harper & Row. (Japanese edition 1967, German edition 1970)

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1960 Fights, Games, and Debates. Ann Arbor: Univ. of Michigan Press. (French edition 1961)

1964 Strategy and Conscience. New York: Harper & Row. (Italian edition 1969, Japanese edition 1912)

1965 Prisoner's Dilemma (with A. Chammah and in collaboration with C. J. Orwant). Ann Arbor: University of Michigan Press.

1966 Two Person Game Theory. The Essential Ideas. Ann Arbor: Univ. of Michigan Press. (Swedish edition 1961, French edition 1969)

1910 N-Person Game Theory. Ann Arbor: Univ. of Michigan Press.

1911 The Big Two. New York: Bobbs-Merrill.

1974 Conflict in Man-Made Environment. Hammondsworth: Penguin Books. (German edition 1915)

1974 (Ed.) Game Theory as a Theory of Conflict Resolution. Dordrecht: Reidel.

1975 Invitation to Semantics. New York: Th. Y. Crowell. (German edition 1972)

1916 The 2 X 2 Game (with M. Guyer and D. Gordon). Ann Arbor: Univ. of Michigan Press.

1983 Mathematical Models in the Social and Behavioral Sciences. New York: Wiley. (German edition 1980)

1986 General System Theory. Essential Concepts and Applications. Tun­bridge Wells, Kent and Cambridge, Mass: Abacus Press.

PREFACE

In the history of science "paradoxes" are not only amusing puzzles and chal­lenges to the human mind but also driving forces of scientific development. The notion of "paradox" is intimately related to the notion of "contradiction". Logi­cal paradoxes allow for the derivation of contradictory propositions (e.g. "Rus­sell's set of all sets not being members of themselves" or the ancient problem with propositions like "I am lying" 1), normative paradoxes deal with contradic­tions among equally well accepted normative postulates (Arrow's "impossibility theorem", Sen's "Impossibility of a Paretian Liberal") and "factual" paradoxes refer to conflicts between conventional opinion based on an accepted empirical theory and contradictory empirical evidence (e.g. the "St. Petersburg paradox" or the "Allais paradox" in decision theory2).

Paradoxes, either logical, normative or factual, also contradict our intui­tions. The counter-intuitive property which seems to be a common feature of all paradoxes plays an important part in the empirical social sciences, particularly in the old research tradition of scrutinizing the unintended consequences of pur­posive actions. Expectations based on naive theories ignoring interdependencies between individual actions are very often in conflict with "surprising" empirical evidence on collective results of social behavior. Examples are numerous reach­ing from panic situations, the individual struggle for status gains resulting in collective deprivation, the less than optimal supply of collective goods etc. to global problems of the armament race and mismanagement of common resources. Also, this theme has a long record in the history of social science. Mandeville in his famous "Fable of the Bees" , Adam Smith, Karl Marx and Friedrich Engels as well as contemporary economists, sociologists, and political scientists like R.K. Merton, M. Olson, S.J. Brams, R. Boudon, Th. Schelling - to mention a few -and, of course, Anatol Rapoport were devoted to this classicai.topic.3 Many, but not all paradoxes of this kind are discussed and are explainable in a prisoner's dilemma context - a research program which is pioneered by the work of Anatol

I See Falletta (1983) for a survey on classical paradoxes.

2 These are discussed by Hagen in this volume.

a See Merton (1936), Olson (1965), Brams (1976), Boudon (1977), and Schelling (1978). For a survey on the history of these idears see Wippler (1978).

x

Rapoport. Resolutions of paradoxes resulting from erroneous analysis or neglect of interdependencies between actors are achieved by proposing a superior theory taking account of the interaction effects of individual behavior. In many cases concepts of game theory are helpful for the task of clarification and resolution of such "interaction" paradoxes.

Apparently, paradoxes have the status of "anomalies" in the sense of Kuhn's (1962) "Structure of Scientific Revolutions", and very often a solution to a par­adox gives rise to a change of scientific paradigms. Contradictions are always a challenge to science, a stimulus to innovate theory in order to "escape from par­adox" (Rapoport, 1967). This is best described in Rapoport's (1967:50) words:

In philosophy, as in science, contradiction is a powerful stimulus to thought. Contradiction is the stuff of which. dialectic. i. made, and dialectic. i. the .tuff on which philosophy feed •.

Paradoxes have played a dramatic part in intellectual history, often fore­.hadowing revolutionary development. in .cience, mathematic. and logic. When­ever, in any discipline, we discover a problem that cannot be .olved within the conceptual framework that supposedly .hould apply, we experience an intellectual shock. The .hock may compel u. to discard the old framework and adopt a new one. It is to this proce88 of intellectual molting that we owe the birth. of many of the major ideas in mathematic. and .cience.

The articles of this collection, all original contributions,4 deal with "para­doxical effects of social behavior". This was the title of the conference of the working group on "Mathematical Sociology (MASO)" held in March 1985 at the Institute for Advanced Studies (lAS) in Vienna.

Twelve authors of this volume participated in the conference (Diekmann, Donninger, Esser, Holler, Kern, Lindenberg, Mitter, Raub, SchiiBler, Voss, Weesie, Wirpler). In addition game theorists and social scientists from all over the world - most of them friends and colleagues of Anatol Rapoport - were asked to contribute to the volume papers that should discuss game theoretical or other models and/or empirical applications and should focus on aspects like "so­cial dilemmas", "social traps", "paradox results of individual actions" or related topics as we wrote in our invitation letter.

Anatol Rapoport was both a member of the MASO-group and director of the lAS from 1980 to 1983. His work constitutes a pioneering contribution not only to game theory and experimental research on cooperation in Prisoners' Di­lemma but also in many other areas of mathematical social sciences . .') Rapoport's research focussed on "holistic" system theory as well as on individual decision

• Except part I and II in Hagen's contribution which are adopted from an earlier article.

5 See selected bibliography of Anatol Rapoport in this volume.

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theory. Asked by one of the editors whether this might be a contradiction ("Ra­poport's paradox"), he answered jokingly that this has to be solved dialectically. Indeed, individual decision makers can be regarded as parts of larger systems of interdependent actors exerting structural effects on the behavior of individuals. Moreover, sometimes the radical simplification that holistic systems behave like individual actors seems to be appropriate. An example is the dynamic model of the armament race of two nations (or one of its many modifications) intro­duced by Richardson, whose writings on this topic were made widely known and discussed by Rapoport (1957). His activities to apply the powerful theoretical ideas of system theory and decision theory to peace research and the struggle for disarmament indicate the deep commitment to the central questions of humanity.

This is expressed by a note from his friend and colleague Martin Shubik for this volume:

A natal Rapoport muBf be honored not onl1/ a, a ,cholar, but a, a human being of great moral integrit1/, a goodfriend, a perceptive and helpful colleague and a talented mu,ician. The depth and breadth of hi, contribution cannot be ,ummed up in a few page,. He ha, demon,trated over hi, life a deep commitment both to ,cientific ,tandartll and to moral illue,. When one work, in the polic1/ ,cience, it i, eztremel1/ difficult to avoid the prellure, of power. The ver1/ nature of the ,ubject and the ,t1/1e of con,ultation that often i, called for place, great prellure, on the ,eriou, ,cholar. M1/ friend A natol ha, demonBfrated that it i, po"ible to re,iBf the,e pre"ure, and to further the application of ,cientific method, without lo,ing ,ight of moral que,tion,. He i, a ,cientific and ,cholarl1/ advocate in the beBf ,en,e. Hi, friend, look forward to ,eeing hi, contribution, continue unabated.

The volume is organized as follows. A first group of papers is concerned with general problems of utility theory and systems theory (Harsanyi, Hagen, Hardin, Kohler, Boulding). Large room is devoted to Prisoner's Dilemma pro­blems. Coleman, Raub and Voss, Schiif3ler, Donninger, and Leinfellner present new results on iterative PD games, to a large extent inspired by Axelrod's (1984) computer tournament. Opp as well as Kern and Rader discuss applications to an interesting case of white collar crime (Opp) and to social movements (Kern and Rader). "Social traps" with a non-PD-structure are analyzed by Diekmann ( "Volunteer's dilemma") and by Mitter ("Tragedy of the Commons"). Shu­bik, Holler, and Schotter focus on games with incomplete information (Shubik), asymmetric games (Holler), and markets with asymmetric information (Schot­ter). New voting paradoxes with interesting consequences for the concepts and the measurement of power are discussed by Brams, Felsenthal, and Maoz.

Sociological and economical examples from different fields like stability of organizations, ethnic stratification, and "privatization" are analyzed by Weesie and Wippler, Esser, and Lindenberg pointing to the unintended consequences of

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individual actions.

Finally, Dinkel as well as Arminger discuss fallacies of aggregation which might be a consequence of the neglect of heterogeneity on the individual level.

We would like to thank Mrs. Beatrix Krones for typing the manuscripts, Dipl.Ing. Helga Schmid, Mr. Kurt Klement, and Dipl.Ing. Ferdinand Demel­bauer for their help in processing the text, and Dr. Eckehart Kohler, Mag. Christian Donninger, Miss Gabriele Wiedenmayer, and Mr. Klaus Mannhardt for proofreading parts of the manuscripts.

Andreas Diekmann and Peter Mitter

REFERENCES

Axelrod, R. (1984). The Evolution of Cooperation. New York: Basic Books.

Boudon, R. (1977). Effets Pervers et Ordre Social. Paris: Presses Universitaires de France.

Brams, S.J. (1976). Paradoxes in Politics. An Introduction to the Nonobvious in Political Science. New York: The Free Press.

Falletta, N.L. (1983). The Paradoxicon. New York: Doubleday.

Kuhn, T.S. (1962). The Structure of Scientific Revolutions. Chicago: University of Chicago Press.

Merton, R.K. (1936). "The unanticipated consequences of purposive social ac­tion". American Sociological Review, 1: 894-904.

Olson, M. (1965). The Logic of Collective Action. Cambridge, Mass.: Harvard University Press.

Rapoport, A. (1957). "Lewis F. Richardson's Mathematical Theory of War". Journal of Conflict Resolution, 1: 249-299.

Rapoport, A. (1967). "Escape from Paradox". Scientific American, 217: 50-56.

Schelling, Th. C. (1978). Micromotives and Macrobehavior. New York: Norton.

Wippler, R. (1978). "Nicht-intendierte soziale Folgen individueller Handlungen". Soziale Welt, 29: 155-179.

CONTENTS

Selected Bibliography of Anatol Rapoport VII

Preface IX

List of Contributors xv

John C. H arsanyi Individual Utilities and Utilitarian Ethics 1

Ole Hagen Some Paradoxes in Economics 13

Russell Hardin Pragmatic Intuitions and Rational Choice 27

Eckehart Kohler Guidelines for Solving Sen's Paradox 37

Kenneth E. Boulding System Breaks and Positive Feedback as Sources of Catastrophe 47

James S. Coleman Social Structure and the Emergence of Norms among Rational Actors 55

Werner Raub and Thomas VOSB

Conditions for Cooperation in Problematic Social Situations

Rudolf A. Schupler The Evolution of Reciprocal Cooperation

Christian Donninger Is it Always Efficient to be Nice? A Computer Simulation of Axelrod's Computer Tournament

85

105

123

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Werner Leinfellner The Prisoner's Dilemma and its Evolutionary Iteration 135

Karl-Dieter Opp The Evolution of a Prisoner's Dilemma in the Market 149

Lucian Kern and Ban,-Georg Rader On Explaining the Rise of the New Social Movementsin Germany 169

A ndrea, Diekmann Volunteer's Dilemma. A Social Trap without a Dominant Strategy and some Empirical Results 187

Peter Mitter Take-Some Games: The Commons Dilemma and a Land of Cockaigne 199

Martin Shubik Games with Perceptive Commanders but with Indoctrinated or Less Perceptive Subordinates

Manfred J. Boller Moral Sentiments and Self-Interest Reconsidered

Andrew Schotter

209

223

On the Economic Virtues of Incompetency and Dishonesty 235

Steven J. Bram" Dan. S. Fel,enthal, and Zeev Maoz New Chairman Paradoxes 243

Jeroen Wee,ie and Reinhard Wippler Cumulative Effects of Sequential Decisions in Organizations 257

B artmut Ener Ethnic Segmentation as the Unintended Result of Intentional Action 281

Siegwart Lindenberg The Paradox of Privatization in Consumption 297

Reiner Dinkel Declining Life Expectancy in a Highly Developed Nation: Paradox or Statistical Artifact? 311

Gerhard A rminger Fallacies and Paradoxes caused by Heterogeneity 323

Author Index 337

LIST OF CONTRIBUTORS

Gerhard Armlnger, Department of Economics, Bergische Universitat Wup­pert ai, D-5600 Wuppertal, Federal Republic of Germany

Kenneth E. Bouldlng, Institute of Behavioral Science, University of Colorado, Boulder, Colorado 80309

Steven J. Brams, Department of Politics, New York University, New York 10003

James S. Coleman, Department of Sociology, The University of Chicago, Chi­cago, Illinois 60637

Andreas Diekmann, Institute of Sociology, University of Munich, D-8000 Mu­nich, Federal Republic of Germany

Reiner Dinkel, Department of Economics, University of Munich, D-8000 Mu­nich, Federal Republic of Germany

Christian Donnlnger, Institute for Advanced Studies, A-I060 Vienna, Austria

Hartmut Esser, Zentrum fur Umfragen, Methoden und Analysen (ZUMA) e.V., D-6800 Mannheim, Federal Republic of Germany

Dan S. Felsenthal, University of Haifa, Israel

Ole Hagen, Norwegian School of Management, Bekkestua, Norway

Russell Hardin, Departments of Political Science and Philosophy, The Univer­sity of Chicago, Chicago, Illinois 60637

John C. Harsanyl, School of Business Administration, University of California, Berkeley, California 94720

Manfred J. Holler, Department of Economics, University of Aarhus, DK-8000 Aarhus, Denmark

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Ludan Kern, German Armed Forces Institute for Social Research (SOWI), D-8000 Munich, Federal Republic of Germany

Eckehart K5hler, Institute for Advanced Studies, A-I060 Vienna, Austria

Werner Lelnfellner, Department of Philosophy, University of Nebraska, Lin­coln, Nebraska 68588

Slegwart Lindenberg, Sociologisch Instituut, Rijksuniversiteit, Groningen, The Netherlands

Zeev Mao., Department of Politics, New York University, New York 10003

Peter Mltter, Institute for Advanced Studies, A-1060 Vienna, Austria

Karl-Dieter Opp, Institute of Sociology, University of Hamburg, D-2000 Ham­burg, Federal Republic of Germany

Hans-Georg Rader, German Armed Forces Institute for Social Research (SOWI), D-8000 Munich, Federal Republic of Germany

Werner Raub, Sozialwissenschaftliches Institut der Universitat Erlangen­Niirnberg, D-8500 Niirnberg, Federal Republic of Germany

Andrew Schotter, C.V. Starr Center for Applied Economics, New York Uni­versity, New York 10003

Rudolf A. Schiif31er, Institute of Sociology, University of Munich, D-8000 Mu­nich, Federal Republic of Germany

Martin Shublk, Cowles Foundation for Research in Economics, Yale University, New Haven, Connecticut 06520

Thomas Voss, Institute of Sociology, University of Munich, D-8000 Munich, Federal Republic of Germany

Jeroen Weesle, Social Sciences Department, Section Theoretical Sociology and Methology, University of Utrecht, NL-3584 CS Utrecht, The Netherlands

Reinhard Wippler, Social Sciences Department, Section Theoretical Sociology and Methology, University of Utrecht, NL-3584 CS Utrecht, The Netherlands