Date of Award

Spring 5-12-2017

Level of Access Assigned by Author

Campus-Only Thesis

Degree Name

Master of Science (MS)

Department

Economics

Advisor

Timothy M. Waring

Second Committee Member

Keith S. Evans

Third Committee Member

David Hiebeler

Abstract

Economic decision-making is often influenced by cooperative tendencies on the part of individuals. Cooperation, the willingness to accept an individual cost in order to benefit another, is an evolutionary mechanism supporting the emergence of social groups. Reciprocity, the tendency to respond in kind to the actions of others, is a well-studied theoretical factor contributing to the evolution of cooperation. Indirect reciprocity is reciprocity that does not take place in an immediate timespan or between the same two individuals, and is almost exclusively observed in Homo sapiens. This research identifies a novel context for studying the evolution of cooperation by indirect reciprocity: the food buying club. Food buying clubs are voluntary consumer groups organized to purchase bulk quantities of food, thereby achieving price savings for members. Buying clubs have been shown to rely on cooperation among members to succeed. I hypothesize that cooperation in buying clubs is supported by indirect reciprocity. To test this hypothesis, I develop an agent-based model of food buying club activity that incorporates both individual rational preference fulfillment and cooperation based on indirect reciprocity. The model is calibrated with data collected from a population of buying clubs and used to estimate a relative measure of group-level propensity to engage in indirect reciprocity. I also demonstrate the model’s capacity to predict outcomes over extended time horizons for groups given a limited set of group characteristics. Despite the complexity of the hypothesized evolutionary mechanisms, the model generally fits the data well and shows potential for further development in a number of related research contexts.

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