Evolution of “Pay-It-Forward” in the Presence of the Temptation to Free-Ride

Satoshi Uchida (), Tatsuya Sasaki, Hitoshi Yamamoto and Isamu Okada
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Satoshi Uchida: Research Center for Ethi-Culture Studies, RINRI Institute, Tokyo 102-8561, Japan
Tatsuya Sasaki: Department of Community Development, Koriyama Women’s College, Fukushima 963-8503, Japan
Hitoshi Yamamoto: Faculty of Business Administration, Rissho University, Tokyo 141-8602, Japan
Isamu Okada: Department of Business Administration, Soka University, Tokyo 192-8577, Japan

Games, 2024, vol. 15, issue 3, 1-15

Abstract: “Paying it forward” is a behavior in which people help someone else because they were helped in the past. Although experimental evidence exists that indicates that real human beings often “pay-it-forward” even in the face of free-rider risks, the theoretical basis for the evolution of this behavior remains unclear. In this paper, we propose a game-theoretical model that explains how pay-it-forward behavior can evolve despite the temptation to free-ride. By assuming that human beings exhibit cognitive distortions, as predicted by prospect theory, and that free-riding is punished with a tiny probability, we demonstrate that pay-it-forward, alongside unconditional altruistic behavior, can evolve and effectively deter free-riding behavior.

Keywords: pay-it-forward; cooperation; social dilemma; punishment; evolutionary game theory; prospect theory; expected utility theory (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2024
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