In this blog post, we will examine why homo economicus, known as thoroughly selfish beings, exhibit altruistic behavior in repeated relationships through the reciprocal reciprocity hypothesis.
Classical economics assumes that all humans are selfish. This is called homo economicus, a term you may have heard before. Homo economicus is characterized by a complete lack of emotional elements and an endless desire for material things. This type of human played a major role in the establishment of classical economics, but it has many problems. This is because real humans behave quite differently from Homo economicus! Homo economicus is endlessly selfish and tries not to lose even a single penny. However, there are people around us who behave altruistically for the sake of others, even if it means suffering a small loss. Why do humans behave altruistically, unlike Homo economicus in economics?
The assumptions of classical economics were formed in conjunction with the economic changes of the Industrial Revolution. At that time, market efficiency and optimal resource allocation were important issues, so it was necessary to simplify human behavior to construct an economic model. However, over time, it became clear that human behavior is not simply driven by economic gain. As it became clear that social and psychological factors greatly influence economic decisions, the concept of homo economicus came under increasing criticism.
The reciprocal reciprocity hypothesis provides a good explanation for why humans exhibit altruistic behavior. This hypothesis states that altruistic behavior in repeated situations is only altruistic on the surface, but is in fact selfish behavior aimed at maximizing one’s own interests. In a one-time situation, selfish behavior that only benefits oneself is more likely to guarantee greater benefits than altruistic behavior that helps the other party at one’s own expense (loss). However, what if the situation repeats itself? Helping each other may guarantee greater benefits in the long run. This case is referred to as the repetition of the prisoner’s dilemma game. Although it seems altruistic when viewed in isolation, it is actually a strategy to maximize long-term benefits.
For example, suppose there is a restaurant called “Maetna” in a tourist area and two people, A and B. A is a resident who has moved to the tourist area, and B is a tourist visiting the tourist area. If A and B visit the restaurant for the first time, who will the owner of Maetna treat better? In a typical situation, the restaurant owner is more likely to treat A, a local resident, better. This is because B will only affect the restaurant’s sales once, while A can affect future sales many times. In other words, if A’s satisfaction with the restaurant increases, the restaurant “Matna” can guarantee its profits in the long run. Furthermore, from A’s perspective, if he says he will visit Matna often in the future, he can expect better service. In other words, if A becomes a regular customer at the restaurant and the restaurant owner’s sales increase, A will be guaranteed better service in the long run. Here, both the restaurant owner and A seem to be acting altruistically by increasing the other party’s profits at their own expense (loss), but in reality, they are simply taking a strategy to increase their own profits in a repeated situation. In other words, they are demonstrating altruism based on the reciprocal reciprocity hypothesis.
The reciprocal reciprocity hypothesis does not view human altruism as a “truly altruistic” act, but rather as a “hidden selfish” act. Humans simply act in consideration of their own long-term gains, rather than helping others through truly noble sacrifices. Did the owner of the restaurant treat A well out of a noble spirit of sacrifice? Did A give up going to other restaurants and become a regular at the restaurant out of pure altruism toward the restaurant owner? No, that is not the case. According to the reciprocal reciprocity hypothesis, these were simply actions taken to maximize their own long-term gains.
In this way, the reciprocal reciprocity hypothesis explains altruistic behavior well. People experience many repeated situations rather than one-time situations. The reciprocal reciprocity hypothesis is significant in that it explains why and how altruistic behavior appears in such real-life situations. It also has humanistic significance in that it allows us to understand the true intentions hidden behind people’s altruistic behavior. Of course, the reciprocal reciprocity hypothesis does not explain all human altruism. (That is why it is a “hypothesis.”) People who donate to starving children in Africa are an example of this. Donors do not expect long-term gains from African children. Such behavior is easily observed in society, but it cannot be easily explained by the reciprocal reciprocity hypothesis, which posits that people display superficial altruism in consideration of their own interests. This is supplemented by other hypotheses, such as the costly signaling hypothesis and the reciprocal human hypothesis. However, despite the above blind spots, the reciprocal reciprocity hypothesis is still valuable in that it accurately captures the essence of many altruistic behaviors.
Despite the limitations of the reciprocal reciprocity hypothesis, this theory still plays an important role in modern economics and psychology. It shows that human behavior is not simply determined by economic calculations, but is the result of social interactions, trust, and long-term relationships. Therefore, this hypothesis helps us understand the complexity of many human behaviors we encounter in our daily lives. It also suggests that human altruistic behavior should be taken into account when designing economic policies. For example, applying the reciprocal reciprocity hypothesis to issues such as the provision of public goods and environmental protection can help us find ways for people to cooperate to achieve better results.
