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Kantian optimization: A microfoundation for cooperation

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  • Roemer, John E.

Abstract

Although evidence accrues in biology, anthropology and experimental economics that homo sapiens is a cooperative species, the reigning assumption in economic theory is that individuals optimize in an autarkic manner (as in Nash and Walrasian equilibrium). I here postulate a cooperative kind of optimizing behavior, called Kantian. It is shown that in simple economic models, when there are negative externalities (such as congestion effects from use of a commonly owned resource) or positive externalities (such as a social ethos reflected in individuals' preferences), Kantian equilibria dominate the Nash–Walras equilibria in terms of efficiency. While economists schooled in Nash equilibrium may view the Kantian behavior as utopian, there is some – perhaps much – evidence that it exists. If cultures evolve through group selection, the hypothesis that Kantian behavior is more prevalent than we may think is supported by the efficiency results here demonstrated.

Suggested Citation

  • Roemer, John E., 2015. "Kantian optimization: A microfoundation for cooperation," Journal of Public Economics, Elsevier, vol. 127(C), pages 45-57.
  • Handle: RePEc:eee:pubeco:v:127:y:2015:i:c:p:45-57
    DOI: 10.1016/j.jpubeco.2014.03.011
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    References listed on IDEAS

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    1. Brekke, Kjell Arne & Kverndokk, Snorre & Nyborg, Karine, 2003. "An economic model of moral motivation," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1967-1983, September.
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    4. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591.
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    More about this item

    Keywords

    Kantian equilibrium; Tragedy of the commons; Other-regarding preferences; Cooperation; Implementation;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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