Voluntary interaction and the principle of mutual benefit

Andrea Isoni, Robert Sugden, Jiwei Zheng

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
14 Downloads (Pure)

Abstract

Most social preference theories are based on observations of non-voluntary interactions. Non-selfish behaviour may take fundamentally different forms in voluntary interactions, such as market transactions. We investigate the Principle of Mutual Benefit – an injunctive norm requiring individuals who enter interactions voluntarily to conform to common expectations about behaviour within them. This norm induces patterns of behaviour inconsistent with existing social preference theories, and allows extrinsic incentives to crowd in trustworthiness. We embed this norm in a model consistent with evidence about promise-keeping, gift exchange, and ‘avoiding the ask’. We present new experimental evidence that people adhere to it.
Original languageEnglish
Pages (from-to)1576-1616
Number of pages41
JournalJournal of Political Economy
Volume131
Issue number6
Early online date16 Nov 2022
DOIs
Publication statusPublished - Jun 2023

Keywords

  • voluntary interaction
  • Principle of Mutual Benefit
  • social norm
  • crowding in
  • non-selfish behaviour

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