Andreas Flache

Manu Muñoz-Herrera

Tutorial Week 5 - Application of TheoriesBlock A 2012/2013

http://manumunozh.wix.com/apptheories

Explaining social phenomena based on theories about individual behavior.

Final example from the lecture

Karl Marx1818-1883 Mancur Olson

1932-1998

Marx’s theory of revolution

Marx’s theory of revolution

Also Karl Marx developed a macro theory of the evolution of societies

These are the core assumptions (see Turner 1991):

All human societies are organized according to the ownership of property

All societies (except communistic societies) are characterized by class conflict (=tension between “interest groups”)

When classes become aware of conflicting interests, they form revolutionary political organizations and fight.

Marx’s theory of revolution

The more subordinate segments of a system are aware of their collective interests [...] the more likely they are to join in overt conflict against dominant segments of a system (Turner 1991:188).

From a macro perspective this makes sense: the bigger the interest group is, the more likely there will be conflict

However, from an individualist’s perspective, you would not expect this (see e.g., work by Mancur Olson)

Olson argued that collective action (i.e., protest) is less likely in big groups. Why?

A core assumption is the following

Olson’s theory of collective action

Individuals have incentives (g>0) to participate in collective action (i.e., dissatisfaction, more rights, increase in wealth...)

Participating in collection action is always costly (c>0)

Individuals will participate in collective action when they believe that the utility they derive from their individual contribution exceeds the cost of participation

Problem: the bigger an interest group is, the smaller is the impact i of each member (i.e., the bigger a demonstration, the smaller is the impact of a single protestor)

Key assumptions:

U(participation)= g ·i - c < 0

Expected gain (small for small influence i) Cost of participation

Nevertheless, we know that people often participate in protest. Olson came up with a solution:

Rational actors will participate if there are sufficiently strong selective incentives

More rights and increase in wealth are collective incentives in the sense that all members of the population can consume them even if they did not participate in the production of the collective good

Selective incentives, in contrast, are consumed only by those individuals who participated in the production of the collective good (those who protested)

Olson argued that for instance social (social norms) and moral (people feel obliged) incentives might play a role

Olson’s theory of collective action

Thus, Olson’s analysis suggests that one should reformulate Marx’s assumption:

The more subordinate segments of a system are aware of their collective interests [...] the more likely they are to join in overt conflict against dominant segments of a system (Turner 1991:188).

If classes provide sufficient selective incentives to motivate individuals, then: The more subordinate segments of a system are aware of their collective interests [...] the more likely they are to join in overt conflict against dominant segments of a system (Turner 1991:188).

Thus, the micro analysis has provided new information which we might have overlooked had we based expectations only on macro theory

Olson’s theory of collective action

Individualistic Explanations

Summary

Main elements of an individualistic explanation (i.e., Coleman, Lindenberg)

IndependentMacro-variable

DependentMacro-variable

Input individual choice: Choice options Information Costs and benefits...

Output: Individual choice

Explanandum: Macro relationship

Theory of action

Bridge assumptions

Transformation assumptions

Elaboration of an individualistic explanation (graphically)

Severity punishmentstate Murder rate

Likelihood punishmentstate

Perceived costs of committing a murder

Probability that an individual will commit murder

+ +

-

Macro

Micro

Elaboration as argument

The higher the perceived utility of a course of action, the more likely an individual will choose this action (theory of action).

Definition: The perceived utility of an action is the difference between the perceived benefits and the perceived costs

The higher the difference between the perceived benefits and the perceived costs of a course of action, the more likely an individual will choose this action(ceteris paribus= assuming perceived benefits/costs of alternative actions are equal)

Committing murder is an action

The higher the difference between the perceived benefits and the perceived costs of committing murder, the more likely an individual will commit murder (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

Elaboration as argument (2)

The more severe the punishment for murder is in a state (of the US), the lower is the difference between perceived benefits and perceived costs of committing a murder in that state (bridge assumption)

The higher the difference between the perceived benefits and the perceived costs of committing murder, the more likely an individual will commit murder (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

The more severe the punishment for murder is in a state (of the US), the less likely an individual will commit murder in that state (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

Elaboration as argument (3)

The less likely individuals in a state commit murder, the lower the murder rate in that state (transformation assumption)

The more severe the punishment for murder is in a state, the less likely an individual will commit murder in that state (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

The more severe the punishment for murder is in a state, the lower the murder rate in that state (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

This is what was tested by the regression analysis in the table shown before Same structure can be used for the likelihood of punishment

ClassworkBuild your boat!

Rational Choice theory

Pro’s

Con’s

Main Assumptions

Anything about

criminals?

Opportunity cost

Would you become a criminal? When would you commit a crime?

Note: It is important to understand the object of your study, not only look at it through a ``scientific microscope’’. It is also important to step aside and speculate beyond your opinions.

Two studies on Drug Dealing

Levitt and Venkatesh (2000) Muñoz-Herrera and Palacio (2006)

Agents involved: drug dealers, consumers, and police, government.Country:U.S.A. (Drug consuming country)

Country:Colombia (Producing country)

Law: In both countries, drugs are illegal.

Exercise:

L1: The more utility an individual perceives, to obtain from choosing a particular action, the more likely the individual will choose this action.

Two studies on Drug Dealing

L1: The more utility an individual perceives, to obtain from choosing a particular action, the more likely the individual will choose this action.

C1: Prices of illegal drugs in drug producing countries are very low

C2: Prices of illegal drugs in drug consuming countries are very high

E1: In U.S. the drug dealing market is organized by gangs and they make use of violence between them

E2: In Colombia. the drug dealing market is organized individual dealers and they do not make use of violence between them

General Law:

Antecedent Conditions:

Observed Phenomenon:

So far

Connection between the lectures

Lave & March model:

Charles A. Lave James G. March

4 Steps

Observe Speculate Deduce Ask

Facts

Phenomenon

result of unknown process

Process

other results

Implications

are implicationsempirically

correct?

Modify

Hempel & Oppenheim model:

Explanans General Law (L1)

Antecedent Condition (C1)

Explanandum Singular Statement (E)

Hempel & Oppenheim model:

Explanans General Law (L1)

Antecedent Condition (C1)

Explanandum Singular Statement (E)

Phenomenon to be explained

Observe

Sentences used to explain E.

process (model)

Speculate

Other results

Deduce

1

2

3

Hempel & Oppenheim model:

Explanans General Law (L1)

Antecedent Condition (C1)

Explanandum Singular Statement (E)

This is not enough: Conditions of adequacy.

1

2

3

Explanandum follows logically from the explanans

Explanans must contain general laws and conditions (any kind?) (what else?)

Explanans must have empirical content

4 ???

Formal Logic: How to test it?

1

2

Star test

Venn Diagrams

Find the distributed letters and underline them: Immediately after all Anywhere after no or

Star the distributed letters in the premises and the non-distributed in the conclusions

Color the areas that do not belong to the premises Mark with an x the are in which some is present in the premises

If all capital letters are stared exactly once and there is exactly one star on the right hand side - VALID

If the conclusion is observed by drawing the premises - VALID

Individualistic Explanation

IndependentMacro-variable

DependentMacro-variable

Input individual choice: Choice options Information Costs and benefits...

Output: Individual choice

Explanandum: Macro relationship

Theory of action

Bridge assumptions

Transformation assumptions

4 cases: Your turn

Government agents sardonically known as the Menstrual Police regularly rounded up women in their work places to administer pregnancy tests: If a woman repeatedly failed to conceive, she was forced to pay a steep “celibacy tax”.

On Christmas day of 1989 crime was at its peak in the United States... experts were predicting darker scenarios.

The evidence linking increased punishment with lower crime rates is very strong. Harsh prison terms have been shown to act as both deterrent (for the would-be criminals on the street) and prophylactic (for the would-be criminals who are already locked up).

Researchers found that in the instances where the woman was denied an abortion, she often resented her baby and failed to provide it with good home... The researchers found that these children were more likely to become criminals. (for the solution you could generalize this example from MORE LIKELY to ALL and focus it in the case of unwanted children)

ClassworkTesting through experiments

Experimental Study

✤ Experimental studies have shown that people do not behave as predicted by the classical model of action (RCT).

✤ BUT... are the deviations (from the model) universal patterns of behavior? or do individuals economic and social environments shape behavior? STOP AND THINK...

✤ We will use three classical games used in experimental studies... Let’s start with the experiments!

Experimental Study -2

✤ The three games you played are called

✤ Ultimatum Game

✤ Dictator Game

✤ Public Good Game

✤ Group Work: What is the RCT prediction regarding the behavior in the UG (proposer, responder), DG (proposer, receiver), PGG (individuals)?

Predictions RCT

✤ The higher the perceived utility of a course of action, the more likely an individual will choose this action

✤ Perceived utility of an action is the difference between the perceived benefits and the perceived costs of an action.

..................................................................................................

✤Prediction for each game?

Predictions RCT - 2

✤Ultimatum Game: If both players are rational, the proposer will know that responder will accept any positive offer, and so will offer the smallest possible amount, which will be accepted.

✤Same for the Dictator game.

✤Public Good: Everyone will free-ride, contributing nothing

Predictions RCT - 2

✤ Ultimatum Game

✤If both players are rational, the proposer will know that responder will accept any positive offer, and so will offer the smallest possible amount, which will be accepted.

In search of homo economicus

Cross Cultural Study

✤ Henrich, Boyd, Bowles, Camerer, Fehr, Gintis, McElreath.

✤ 12 experienced field researchers (economics, anthropology, etc)

✤ 12 countries on five continents

✤ 15 small-scale societies.

The Ultimatum Game

✤ Example: Devaitions from the predictions

✤ Where: industrial societies (western world)

✤ Mean offers close to 44 percent of the “pie”

✤ Modal offers are consistently 50 percent

✤ Offers below 20 percent are rejected with probability 0.40 to 0.60

✤ STOP AND THINK... Why?

Explanation

✤ What explains group-level differences

✤ preferences or expectations are affected by group specific conditions, such as social institutions or cultural fairness norms.

✤ Subjects behavior: When faced with a novel situation (the experiment), they looked for analogues in their daily experience, asking “what familiar situation is this game like?” and then acted in a way appropriate for the analogous situation.

The Ultimatum Game

✤ Case 1: Rejection of high offers

✤ Where: Au and Gnau communities in Papua New Guinea - they made hyper-fair offers (>50%), they rejected both unfair and hyper-fair offers with nearly equal frequencies

✤ Au: Mean offers is 43%. The modal offer is of 30% (33 percent of the participants). The rejection rate is of 27%, with 100% rejection rate of low offers (<20%).

✤ Au: Mean offers is 38%. The modal offer is of 40% (32 percent of the participants). The rejection rate is of 40%, with 50% rejection rate of low offers (<20%).

The Ultimatum Game

✤ Case 2: No rejection of low offers

✤ Where: The Aché from Paraguay - they did not reject any low offer, and despite this the vast majority of the Aché (94 percent) made offers above 40% of the stake size.

✤ Mean offers is 51%. The modal offer is between 40 and 50% (75 percent of the participants). The rejection rate is of 0%, consequently with 0% rejection rate of low offers (<20%).

✤ Au: Mean offers is 38%. The modal offer is of 40% (32 percent of the participants). The rejection rate is of 40%, with 50% rejection rate of low offers (<20%).

Explanation Case 1

✤ The hyper-fair UG offers (>50%) and the frequent rejections of these offers among the Au Gnau reflects the culture of gift-giving found in these societies. Among these groups, like many in New Guinea, accepting gifts, even unsolicited ones, commits on to reciprocate at some future time to be determined by the giver. Receipt of large gifts also establishes one in a subordivate position.

✤ Consequently, excessively large gifts, especially unsolicited ones, will frequently be refused because of the anxiety about the unspecific strings attached.

Explanation Case 2

✤ The Aché did not reject low offer, and despite this the vast majority of the Aché (94 percent) made offers above 40 percent of the stake size. This coincides neatly with ethnographic descriptions indicating widespread meat-sharing and cooperation in community projects.

✤ Aché hunters, returning home, quietly leave their kill at the edge of the camp; their catch is later discovered and collected by others and then meticulously shared among all the camp... We think likely that the stake in the game seemed to some of the Aché subjects as analogous to their catch.

See you next week