CEFOM/21 First International Symposium “Cultural and Ecological Foundations of the Mind” Hokkaido University, June 23-26, 2003 Social Institutions and Social Adaptation Tasks An Error Management Approach Toshio Yamagishi (Hokkaido University)

One-minute Version 1 To successfully adapt to a particular social institution, one needs to have a set of decision rules (heuristics).

One-minute Version 1 To successfully adapt to a particular social institution, one needs to have a set of decision rules (heuristics). 2Which decision rule is adopted as the default depends on the logic of error management.

One-minute Version 1 To successfully adapt to a particular social institution, one needs to have a set of decision rules (heuristics). 2Which decision rule is adopted as the default depends on the logic of error management. 3Behaving with a default decision rule looks like behaving on a preference. However, given a cue indicating that the default decision rule can be replaced by another, situation-specific one, “preference” can change.

One-minute Version 1 To successfully adapt to a particular social institution, one needs to have a set of decision rules (heuristics). 2Which decision rule is adopted as the default depends on the logic of error management. 3Behaving on a default decision rule looks like behaving on a preference. However, given a cue indicating that the default decision rule can be replaced by another, situation-specific one, preference can change. 4The set of shared, default decision rules can be (and often is) self-sustaining in the sense that behaviors reflecting such default decision rules collectively create a social institution that makes the decision rules adaptive.

SOCIAL INSTITUTIONS 1 (Rules of the) game 2Incentives for individual decision makers 3There is a dynamic relationship between decision rules players come to acquire and the structure of the game. NOT 4A social institution is NOT a simple aggregation of individuals’ preferences.

SOCIAL INSTITUTIONS NOT 1 (Rules of the) game 2 Incentives for individual decision makers 3 There is a dynamic relationship between decision rules players come to acquire and the structure of the game. 4 A social institution is NOT a simple aggregation of individuals’ preferences. An Example: Maghribi Traders Maghribi Traders 11th Century Mediterranean Trades faced the agent problem (lemons problem)

SOCIAL INSTITUTIONS NOT 1 (Rules of the) game 2 Incentives for individual decision makers 3 There is a dynamic relationship between decision rules players come to acquire and the structure of the game. 4 A social institution is NOT a simple aggregation of individuals’ preferences. An Example: Maghribi Traders Maghribi Traders 11th Century Mediterranean Trades faced the agent problem (lemons problem) How to control an agent who operates in a remote location.  Extreme information asymmetry Agent Problem How to control an agent who operates in a remote location.  Extreme information asymmetry

Standard solution to the agent problem Pay a high premium to the agent, such that the risk of losing future premiums outweigh the immediate gain of opportunistic behavior. Example: Norenwake among Edo merchants. This solution faces a problem that the premium becomes prohibitively high.

Maghribi Traders’ Solution  Hire only another Maghribi merchant as an agent.  Spread reputation of a dishonest agent to the Maghribi coalition.  Refrain from hiring a Maghribi merchant who has acquired a reputation for being dishonest. This practice reduces the benefit level in alternative trades for the agent who has acquired a dishonest reputation and has been kicked out of the coalition. The premium required for making an agent behave honestly is payment above this depressed level of alternative profit.  Reputation shared within a bounded circle of traders facilitates the resolution of the agent problem.

SOCIAL INSTITUTIONS Collectivistic Social Institution 1Incentives for mobility across group boundaries are minimum. 2Mutual monitoring and sanctioning rather than monitoring and sanctioning by legal authorities constitute the foundation of social order. requires the closure of group boundaries 3The informal source of social order requires the closure of group boundaries. (Exclusion is the most cost effective means for social control. In addition, exclusion often solves the problem of the second-order social dilemma.)

Collectivistic Social Institution 1Incentives for mobility across group boundaries are minimum. 2Mutual monitoring and sanctioning rather than monitoring and sanctioning by legal authorities constitute the foundation of social order. 3The power of an informal source of social order requires the closure of group boundaries. 4A collectivistic social institution is in equilibrium. The Collectivistic Adaptation Strategy  Ingroup favoritism  closure of group boundaries  Mutual Monitoring and Sanctioning (exclusion) against those who do not practice ingroup favoritism When most other individuals (in one’s own group and in other groups) are adopting this collectivistic adaptation strategy, it is more profitable for each individual to adopt this strategy than not.  Adaptation of the collectivistic adaptation strategy is not a matter of preference, but a matter of the (collectively created and maintained) incentive structure.

SELF-SUSTAINING SOCIAL INSTITUTION The collectivist institution is a social situation in which most individuals use the collectivistic adaptation strategy and in which using the collectivistic adaptation strategy produces individually better outcomes than not using it. Example: Permanent Employment System  Staying with the current employer and behaving in such a way so as not to be ostracized is not a matter of preference, but a matter of using a default decision rule.

Example: Permanent Employment System  Staying with the current employer and behaving in such a way so as not to be ostracized is not a matter of preference, but a matter of using a default decision rule. Default Decision Rules (Heuristics) Default decision rules facilitate the use of the dominant adaptation strategy (e.g., collectivistic adaptation strategy). Examples of the collectivistic adaptation strategy:  Avoid behavior that is not liked by other members of the group.  (At least pretend to) care for the interest of the group or care for the other members of the group. These rules are default rules such that they are used in the absence of cues suggesting that the situation does not require the use of collectivist adaptation strategy.

An example of “preferences” for uniqueness and for conformity An example of “preferences” for uniqueness and for conformity (Kim & Markus, 1999)  Asians prefer to conform whereas Americans prefer to be unique.  These individual preferences are aggregated into social norms.  Norms for conformity or for uniqueness encourage individuals to cultivate correspondent preferences.

An example of “preferences” for uniqueness and for conformity Choice of a Pen: An Experiment  K&M99: Ss are given a chance to choose a pen from a set of 5 pens. The set consists of two colors.  K&M99: Asians chose the majority color and Americans chose the minority color.

Choice of a Pen: An Experiment We successfully replicated K&M99 with a set of 5 pens (1 minority and 4 majority) Colors are counter-balanced.  2 (1, n=84) = 7.10, p <.01

Choice of a Pen: An Experiment After Ss participated in an experiment, Japanese Ss behaved as if they were Americans Before and after experiment among Japanese participants  2 (1, n=357) = 13.98, p <.0001 Exclusing the experimenter-absent condition and those who waited more than 5 minutes

Choice of a Pen: An Experiment American Ss also came to prefer the minority color more after they participated in an experiment.

Choice of a Pen: An Experiment Why do Ss come to “prefer” the minority color more after they participate in an experiment? Does the type of experiment matter? Japanese participants After an experiment focused on self (with no monetary incentives) versus after a game experiment with monetary incentives.  2 (1, n=299) = 0.91, ns.

Choice of a Pen: An Experiment Presence of an experimenter matters!! Choice before experiment All participants are Japanese  2 (1, n=92) = 7.32, p <.01

Choice of a Pen: An Experiment Waiting for 5 minutes matters!! Choice before experiment All participants are Japanese  2 (1, n=92) = 16.13, p <.001

Choice of a Pen: An Experiment “Leave the best to others!!!” The default decision rule in this situation is: “Leave the best to others!!!” When it is salient that taking the best does not offend others, Japanese Ss take the minority pen just as American Ss do.  My behavior is not being observed! Experimenter absent  I suffered and so I am entitled to take what I want! 5 minute waiting Although there was no explicit norms against taking the minority color, they applied the DEFAULT decision rule.

Self Enhancement versus effacement Another Experiment (Gong, Suzuki, & Yamagishi, 2001) Ss first took a "Integrative Cognitive Ability Test" (fake). They were tested on 20 tasks similar to the two examples below: Default Judgment: S judged whether his/her performance was above or below the school (Hokkaido University) average.

29% 71% ６９％ ３1％３1％ When Ss were paid for making the correct judgment, self-enhancement rather than self-effacement occurred! Self-enhancement versus self-effacement

Allocation of Attention to the Object and the Context A similar analysis may be performed on the allocation of attention to the focal object versus context information  Nisbett’s The Geography of Thought Social Adaptation Task: prediction of other’s behavior In a collectivistic social institution, individuals’ behavior is greatly constrained by its implications to others.  Prediction of another person’s behavior requires the knowledge of the implications of the focal individual’s behavior to others surrounding him. Under an individualistic social institution (consisting of formal legal and enforcement devices), prediction of another person’s behavior requires knowledge about the focal individual’s internal states and dispositions.

Experiment of Maghribi and Genovese Social Institutions Hegemony of Mediterranean trades shifted from Maghribi coalition to Genovese merchants in the 12 th Century. Maghribi coalition: Social order is maintained by reputation within closed group boundaries. Genovese merchants: Social order is maintained by formal legal and enforcement devices. More expensive to maintain, but makes across-group trades possible. Ss engage in trade activities for 90 minutes in one of the two institution conditions and then are tested for “cultural differences.”

Experiment of Maghribi and Genovese Social Institutions A Pre-test Experiment  Two 50-person groups were run, each corresponding to one of the two institution conditions.  Each 50-person group is composed of five 10-person groups.  Each 10-person group represents a community. The 50-person group represents a total society.  Each S trades with either a member of his own community or a member of another community.  The trade market is characterized by information asymmetry.  If the trading partner is honest, across-community trade is more profitable than within-community trade.  In both conditions, Ss voluntarily make contributions to the establishment of a community-based sanctioning system that monitor and punish dishonest traders among their own community members.

Experiment of Maghribi and Genovese Social Institutions Collectivistic Institution (Maghribi) Condition: Collectivistic Institution (Maghribi) Condition: Community members share reputation of their own members. Individualistic Institution (Genovese) Condition: Individualistic Institution (Genovese) Condition: Reputation sharing within community is not possible. The only source of social order is the voluntary-based formal monitoring/sanctioning system. Prediction Ss in the collectivistic institution condition will come to exhibit psychological traits usually found in the collectivist or interdependent culture more strongly than Ss in the individualistic institution condition will. Ss are students of University on the Air, age 20 – 63, mean = 40

Experiment of Maghribi and Genovese Social Institutions Prediction 1: Ss in the collectivistic institution condition will be more interdependent and less independent in their responses to the self- response questionnaire scales (Takata, 1999). Independent Self Scale F(1, 86) = 5.60, p <.05 Interdependent Self Scale F(1, 86) = 5.05, p <.05

Experiment of Maghribi and Genovese Social Institutions Prediction 2: Choice of a pen (after the trading experiment)  2 (1, n=90) = 2.13, ns.

Experiment of Maghribi and Genovese Social Institutions Prediction 3: Frame Line Test Ss in the individualistic institution will be more accurate in absolute judgment and less accurate in relative judgment.

Experiment of Maghribi and Genovese Social Institutions Being exposed to the social institution that controls members’ behavior through informal mutual monitoring and sanctioning makes participants more aware of interdependent construal of self and less aware of independent construal of self, to behave in a less conformist manner, and to allocate more attention to context information.  These findings, together with the previous ones, indicate that the Japanese participants in those experiments can switch between being culturally “Japanese” or “American.” Implications  Default strategy for social adaptation (including allocation of attention) varies across societies reflecting the dominant forms of social institutions.

Error Management Advantage of having default adaptation strategies?  Cognitive miser approach to heuristics? It seems that the best adaptation strategy is to accurately assess the situation and to choose the most profitable alternative from the set of available alternatives. Is there any advantage of having a default strategy (including decision rules and allocation of attention) other than savings in cognitive resources?  Cognitive miser approach to heuristics? Question: Question: Are there additional advantages in using a default adaptive strategy than just savings in cognitive resources? I believe there is one. Using a default adaptive strategy reduces one type of error in exchange for the increase in another type of error.

Error Management 1 Humans are fallible. Even the smartest people assisted by computers can make errors in social adaptation. 2 The consequences of an error in social adaptation can be more serious than those of another error. Some errors are deadly, allowing for no future recovery (e.g., the errors that invite ostracism from the community). 3 It is better to reduce the deadly error than to reduce all types of errors. 4 What kind of errors are most serious depends on the dominant form of social institutions in a society. 5The default adaptation strategy is designed to reduce the most serious errors in a society where a particular type of social institution is dominant.

Error Management The seriousness of a particular type of error varies depending on the social institution one faces. Example: The errors that invite ostracism The errors that invite ostracism have extremely serious consequences in a society dominated by collectivistic institutions. This is because groups and relations are closed to outsiders in such a society, and thus those who are ostracized are not accepted by other groups. Individuals who make these errors and become ostracized fail to obtain resources from community-based cooperation system. In contrast, in a society dominated by individualistic institutions, the ostracized people can find alternative means to obtain necessary resources. E.g. Life-time employment system versus open labor market

Summary and Conclusions 1 Some of the cross-cultural differences in psychological traits can be conceived as elements of the default adaptation strategy under different social institutions. 2 Social institutions are self-sustaining in the sense that they are created and maintained by individuals’ behaviors following the default adaptation strategy. 3 The choice of the default strategy is affected by the error management “strategy.” 4 The logic of backward engineering can be applied to cross-cultural differences in the human mind. Identify cross-cultural differences in the mind. Logically identify institutional differences that make the cross- cultural differences in the mind adaptive in each culture. Derive predictions of other cross-cultural differences between societies differing in dominant forms of institutions.

Final remarks (the 10 minute discussion)  Some social adaptation tasks are universal, and others are institution-specific.  Thus, some default adaptation strategies are universal and others are institution-specific.  Reciprocity and strong reciprocity The universal strategies may be hard-wired.  Whether the strategy is universal or institution- specific, the same logic of backward engineering can be productively applied.