Social Choice and Culture

Meeting of the Society for Social Choice and Welfare, Moscow 2010

2010-07-22 1

Pieter H.M. RuysTilburg University

July 2010

1. Introduction

• Social preferences are derived from individual preferences:– Methodological Individualism

• The utility concept: capacity to enjoy something • The social choice concept: pairwise comparison of • The social choice concept: pairwise comparison of

alternatives generates a ‘best’ one

– Assumed is:• A homogeneous Level Playing Field on the level of

voters

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The relational capacity approach

– Capacity of an organism to interact with another organism (an individual, an animal, a political party, a football team)

• The Positional Capacity concept • The Positional Capacity concept

– A hierarchy of capacities is expressed in patterns• Existing (inherited) patterns• Virtual patterns

– An Organism is an activated pattern.

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Social choice

• Western voting democracy: – What is the individual’s meaning or intention of a vote cast

by her or him? In the US, compared to Pakistan? – What is the elected person’s interpretation of the passage of – What is the elected person’s interpretation of the passage of

power from the masses to the parliament?• The classical assumption that individual citizens have

received a right and nobody should question their sovereignty about using this right?

– Majority rule: destroy the existing culture?– Emancipatory motives: integrate two cultures!

• We also need a Level Playing Field on the (higher) cultural level.

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Outline

1 Introduction: Social preferences are only derived from individual preferences

2 The capacity approach: a vertical ordering of relational capacities3 An example: Hofstede’s cultural dimensions as positional capacities

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3 An example: Hofstede’s cultural dimensions as positional capacities4 Social choice and culture:

Social preferences determining individual preferences5 The horizontal equivalence relations: Level Playing Fields6 The GLR-Theorem on stability; stabilizing institutions7 Duality between the Value Domain and the (institutional) Power

Domain8 Conclusions: from a single level playing field of alternatives (Arrow) to

a multilevel playing fields of capacity patterns

2. The capacity pattern approach: a vertical ordering of relational capacities

• A relational capacity of an organism is its ability to attract or to repulse one or more other organisms and to interact with those other organism if attraction results in a match.

• A relational capacity is composed of elementary capacity-• A relational capacity is composed of elementary capacity-qualities; the composition and organization of these capacity qualities, called pattern, constitute the organism.

• Example: cultural dimensions of a nation state (Hofstede)• Rawls, Sen

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A society

• A society Σ = Ω(K), N(ω), ω(V),ω(P) is represented by six concepts:– A set of hierarchically ordered positional capacities, K;– an organism possibility set, containing realized, patterns – an organism possibility set, containing realized, patterns

of relational capacities, Ω(K);– A set of virtual patterns, ω;– a population with teams in level playing fields for each

relevant pattern of relational capacities, N(ω);– a welfare criterion for patterns aiming at maximizing

diversity in relational capacities in the value domain, ω(V); – an power criterion for incorporating a potential organism,

ω(P).

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Vertical Ordering of Capacities

• A positional capacity k2 in K0 succeeds k1, k1≤ k2, if and only if k2 = k1٧k2;

• k1 in K0 precedes k2, k1≤ k2, if and only if k1 = k1٨k2. • A positional capacity that succeeds another positional capacity • A positional capacity that succeeds another positional capacity

has a lower level and a greater diversity (richness).• A positional capacity that precedes another positional capacity

has a higher level and a greater coverage (power).•

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The capacity space

• The capacity space, K, in a society Σ is spanned by a finite set of specific capacity-qualities, K0, represented by the n-dimensional Euclidean (projective) geometry, En(F2), over the field of integers modulo two, denoted by K = (K0, En(F2)).

• A vector in the capacity space is called a positional capacity. It • A vector in the capacity space is called a positional capacity. It consists of zeros and ones, indicating the presence (value 1) or absence (value 0) of a capacity-quality.

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3. Example: Hofstedes cultural dimensionsas positional capacities

1. Power distance (PDI)2. Individualism / collectivism (IND)3. Masculinity / femininity (MAS)3. Masculinity / femininity (MAS)4. Uncertainty avoidance (UAI)5. Long- / short-term orientation (LTO)

These cultural patterns affect individual preferences

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Description of cultural dimensions

• Power Distance (PDI):– The extent to which the less-powerful members of society

accept that power is distributed unequally (deep hierarchy)• Collectivism – Individualism (IND):• Collectivism – Individualism (IND):

– People belong to ‘in-groups’, which ‘look after them’ in exchange for loyalty.

• Masculinity – Femininity (MAS):– Emphasis on achievement and success – on caring for

others and quality of life• Uncertainty Avoidance (UAI):

– People feel threatened by uncertainty and ambiguity and tryto avoid these situations.

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PDI IVD MAS UAI

USA 40 91 62 46

UK 35 89 66 35

Netherlands 38 80 14 53

Sweden 31 71 5 29

Denmark 18 74 16 23

Italy 50 76 70 75

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Greece 60 35 57 100Poland 68 60 64 98

Belgium 65 75 54 94

France 68 71 43 86

Germany 35 67 66 65

Austria 11 55 79 70

India 77 48 56 40

Japan 54 46 95 92

Mexico 81 30 69 82

Pakistan 55 14 50 70

Venezuela 81 12 73 76

PDI IVD MAS UAI

USA 1UK 1 0Netherlands 1 0Sweden 1 0 0Denmark 0 1 0 0Italy 1 1

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Greece 1Poland 1Belgium 1 1France 1Germany

Austria 0 1India 1Japan 1 1Mexico 1Pakistan 0Venezuela 1 0 1

Scotch whisky and power distance

100

Regular Consumption Scotch Whisky (r = .74)

0

50

FRA POR GRE SPA ITA NET GER SWI FIN NOR IRE DEN AUS

Power Distance

© Marieke de Mooij (2011)

Car ownership and individualism

100

Percents of households that own a car. r = .83

10

55

USA UKCANNZLITAFRASW

EIR

ENORGERPOLCZESLKJPNBRAMEXMALCHL

Individualism-collectivism

© Marieke de Mooij (2011)

Uncertainty Avoidance (UAI)

100

120

140

160

Second hand cars

120

% Preferring new cars 1970 - 1991 - 1997

UAI

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0

20

40

60

80

GRE BEL FRA AUS FIN NET IRE SWE

Onzekerheidsvermijding

Eurodata 91: 1e & 2e auto tweedehands gekocht

EMS 95: 1e auto tweedehands gekocht

0

60

POR SPA ITA GER SWI NOR UK DEN

#REF!

#REF!

#REF!

#REF!

© Marieke de Mooij (2011)

60

120

UAI+

Car buying motives

France

Spain

Portugal Greece

Belgium

GermanySwitzerland

ItalyAustria

Finland

FASTTECHNOLOGY

DESIGNSTYLEFASHION

RenaultCitroën

Audi, Volkswagen, BMWAlfa Romeo

0

60

0 50 100

UAI-

MAS

Sweden UK Ireland

Switzerland

PolandNetherlands

USA

Finland

Denmark

Norway

SAFETYFUNCTIONALVALUE STATUS

POWERBIG

FEM

SUVVolvo

© Marieke de Mooij (2011)2010-07-22 17

4. Social choice and culture:

• Social preferences are co-determining individual preferences

• Patterns and democracy:

• Secularism vs. religiosity

• Compromises of democratic politics vs. violent extremism

• The West as enlightened society to be emulated vs. the West as calculating imperial power to be resisted

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The Organism Possibility Set

• An organism, F, identified by its pattern of capacity-qualities in the capacity space, is represented by a digraph, F = G(K, DF), where DF is the set of capacity-qualities that potentially match externally with one or more other organisms.

• The set of organisms in the society Σ is called its organism • The set of organisms in the society Σ is called its organism possibility set and denoted by Ω(K).

• Consider two organisms in Ω(K); the organism F1 precedesorganism F2, if the least upper bound of F1 precedes the least upper bound of F2. An organism F1 that precedes another organism, F2, is positioned at a higher level in the OPS. A pathof organisms is a sequence of succeeding organisms.

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A hierarchy of organisms

t(k1) Level 1

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t(k21) t(k22) t(k23)

t(k33)

Level 2

Level 3

Level 4

A individual path in a Capacity Pattern

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5. The horizontal equivalence relations: Level Playing Fields (LPFs)

• Given a society Σ= Ω(K), N(ω), ω(V),ω(P), with a pattern-profile p= (pa, pb, …,pc) in Ω. The individuals having the skill to activate pattern pi belong to the set N(pi), called a set of specialists for pattern p . specialists for pattern pi.

• Given a society Σ(K, Ω, N), with a pattern-profile p in Ω. A subset of N(pi) that is assigned to activate an organism with pattern pi is called a team if all its members interact and no member interacts with a member outside the team. The set of teams in N(pi) is called a level playing field for the pattern pi, and denoted by LPF(pi).

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Mathematical Property of a LPF

• The pair (N(pi), LCF(pi)) is a matroid, where the set of teams in LPF(pi) is equal to the set of minimal dependent subsets of the matroid, for each pattern pi in Ω The set (LCF) constitutes the set of minimal dependent subsets in the population N, which defines a matroid. defines a matroid.

• A matroid is finite set and a collection of its subsets (called independent sets), such that (i) the empty set is independent; (ii) any subset of an independent set is independent; and (iii) for any two independent sets there exist an element in the larger set such that when this element is carried over to the smaller set, this new set remains independent.

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Social Property of a LPF

• A homogeneous population on a certain level embedding:

– Virtual (non-activated) patterns on the same level– Chaotic, unstable and probabilistic matches– Chaotic, unstable and probabilistic matches– Context of competition– Imitation and learning

– Social entrepreneur activating a feasible pattern• Stabilizing by institutionalizing • Implies a higher level of LPF

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6. The GLR-Theorem on stability;stabilizing institutions

At a single Level Playing Field for binary patterns, economic agents cooperate through the activation of potential bilateral economic relationships.

Within such a relational structure there emerges a certain Within such a relational structure there emerges a certain cooperation structure, or “activity (matching) pattern".

These activities are universally stable, i.e.; for any preference profile, no agent has the incentives or the ability to change the prevailing activity pattern, if and only if

• The matching structure is bipartite in the sense that there exists a partitioning of the set of economic agents.– This is giving economic agents roles: an institutional

property.2010-07-22 25

7. Duality between the Value Domain and the (institutional) Power Domain

• Value capacities (characteristics)

• Power capacities (characteristics)• Power capacities (characteristics)

• A fit between the two

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A hierarchy of value characteristics Level

Value characteristics

Team assignments

1 2( ) ( ), ( ),..., ( )rT V t v t v t v=ℓ ℓ ℓ ℓ

Types of services (value generating

services)

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ℓ = 1

Normative values

Society-wide group

Communal services

(Body of rights) ℓ = 2

Interpersonal

values

Specific groups

Social Services

(Access to …knowledge)

ℓ = 3

Individual values

Individuals

Private services

(Utility generating) Table 1. A

A hierarchy of power characteristics determining power teams at three levels

Level

Power

characteristics 1 2 3

1 2 3

, , P P P P

P P P

=⊂ ⊂

Team assignments

1 2 3( ) ( ), ( ), ( )T P t p t p t p=ℓ ℓ ℓ ℓ

Mode of Rationality (Decision mechan-

ism)

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1 2 3P P P⊂ ⊂

ℓ = 1

Public powers

Society-wide group

Leader rationality

ℓ = 2

Social powers

Specific groups

Rule rationality

ℓ = 3

Private powers

Many small groups

Act rationality

Examples of rule-rationality

• The behavior of ants in an ant-colony: – Act-rational behavior of female worker ants is suppressed in

favor of rule-rationality, resulting in an evolutionary success story of some 150 million years.

• The subprime financial crisis: – Act-rationality prevails over rule-rationality and the system

almost collapses;

• Internalized rule-rationality:– Moral behavior.

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Transaction value and interaction value

top (CEO)

Provider

Principal-Agent relations

A Firm in a Market

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Diagram 5: Interactions and Transactions by a Firm

Front positions: Service

Performers Service

Receivers

Middle management

Provider (Supplier)

Procurers (Demanders)

Interactions

Transactions

Relational actions (services, value generating)

Performers’ Actions

Receivers’ Actions

Collective

performance (Level 1)

Cooperative performance

(Level 2)

Individual performers

(Level 3)

Individually

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Collective utilization (Level 1)

Community services

Socially performed public

services (SGI)

Individually performed

public services (SGEI)

Cooperative utilization (Level 2)

Community performed social

services

Social services (SSI)

Individually performed

social services

Individual utilization (Level 3)

Community performed individual services

Socially performed services for individuals

Individual services

Transactions (power relations)

Providers’ Actions

Stakeholders’ Actions

Public

provision (Level 1)

Cooperative provision (Level 2)

Individual provision (Level 3)

Public-Private

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Public acquisition (Level 1)

Public transactions

Public-social transactions

Public-Private transactions

(PPP); outsourcing )

Cooperative acquisition (Level 2)

Social-Public transactions

Social transactions

Social-private transactions

Individual acquisition (Level 3)

Private-Public transactions; ballot box democracy

Private-social transactions

Private transactions

8. Conclusion

• From – a single level playing field of alternatives (Arrow)

• to • to – a multilevel playing fields of capacity patterns

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Value generating Interactions between Teams with an Opposite Orientation

t

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