Tit-for-tat and poverty

This past semester I reread Robert Axelrod's The Evolution of Cooperation: Revised Edition. The book was originally published in 1984 and a revised edition was published in 2006. I could not see any changes in the revised edition other than a forward by Richard Dawkins.

Axelrod demonstrates that in situations where we are playing a repeated prisoner's dilemma, a simple tit-for-tat strategy is successful against a wide and diverse group of other strategies. Tit-for-tat invites cooperation and discourages exploitation. Richard Dawkins was so impressed with Axelrod's conclusions that the suggested the book should replace the Gideon Bible.

There were a number of places where I noticed potential extensions to Axelrod's discussions. For example, in his Chapter Seven, "How to Promote Cooperation," Axelrod says we need to enlarge the shadow of the future. When future interactions become more important, the temptation to exploit the other for short-term gain is reduced. Cooperation is more likely when both parties value the benefits of future interaction.

One obvious result of this principle is that we should expect married couples to do better than cohabitating couples. (For those who say that a marriage certificate is only a piece of paper, so are cash and the most of what I have in my safety deposit box.) I will leave it to the reader to complete the argument for marriage.

Another implication that Axelrod does not explore is the link between poverty and the extent to which people emphasize the present versus the future. There is a substantial literature showing that the poor tend to be present-oriented. However, correlation is not causation. Do the values of the poor, including their focus on the present, cause poverty, or does their poverty cause people to be present-oriented?

Adam Smith recognized that use of markets generated wealth because specialization and division of labor increase social cooperation. However, many or most of our interactions with others are not market transactions. A person with no concern for the future who takes short-term gains from others at the expense of long-term cooperation will earn a lower standard of living as a result. Hence, Axelrod's discussion suggests that present-orientedness causes poverty. (It may also be that poverty causes present-orientedness, in which case a feedback loop traps people in poverty.)

Addendum: The marshmallow experiment shows extreme present-orientedness in small children, but I am not sure it adds anything to the above discussion. However, it makes for fun youtube viewing.