Invasion of Optimal Social Contracts

Alessandra F. Lütz (), Marco Antonio Amaral, Ian Braga and Lucas Wardil
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Alessandra F. Lütz: Departamento de Física, Universidade de Minas Gerais, Belo Horizonte 31270-901, Brazil
Marco Antonio Amaral: Instituto de Humanidades, Artes e Ciências, Universidade Federal do Sul da Bahia, Teixeira de Freitas 45988-058, Brazil
Ian Braga: Departamento de Física, Universidade de Minas Gerais, Belo Horizonte 31270-901, Brazil
Lucas Wardil: Departamento de Física, Universidade de Minas Gerais, Belo Horizonte 31270-901, Brazil

Games, 2023, vol. 14, issue 3, 1-14

Abstract: The stag-hunt game is a prototype for social contracts. Adopting a new and better social contract is usually challenging because the current one is already well established and stable due to sanctions imposed on non-conforming members. Thus, how does a population shift from the current social contract to a better one? In other words, how can a social system leave a locally optimum configuration to achieve a globally optimum state? Here, we investigate the effect of promoting diversity on the evolution of social contracts. We consider group-structured populations where individuals play the stag-hunt game in all groups. We model the diversity incentive as a snowdrift game played in a single focus group where the individual is more prone to adopting a deviant norm. We show that a moderate diversity incentive is sufficient to change the system dynamics, driving the population over the stag-hunt invasion barrier that prevents the global optimum being reached. Thus, an initial fraction of adopters of the new, better norm can drive the system toward the optimum social contract. If the diversity incentive is not too large, the better social contract is the new equilibrium and remains stable even if the incentive is turned off. However, if the incentive is large, the population is trapped in a mixed equilibrium and the better social norm can only be reached if the incentive is turned off after the equilibrium is reached. The results are obtained using Monte Carlo simulations and analytical approximation methods.

Keywords: game theory; social norms; social dynamics (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2023
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