DP6950 On the Nature, Modeling, and Neural Bases of Social Ties

Author(s): Richard Ridderinkhof, Mirre Stallen, Frans A.A.M. van Winden
Publication Date: August 2008
Keyword(s): Affect, Modeling, Neuroeconomics, Social Ties
JEL(s): D01, D64, D87, H41, I10
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6950

This paper addresses the nature, formalization, and neural bases of (affective) social ties and discusses the relevance of ties for health economics. A social tie is defined as an affective weight attached by an individual to the well-being of another individual (?utility interdependence?). Ties can be positive or negative, and symmetric or asymmetric between individuals. Characteristic of a social tie, as conceived of here, is that it develops over time under the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is not related to strategic behavior such as reputation formation but seen as generated by affective responses. A formalization is presented together with some supportive evidence from behavioral experiments. This is followed by a discussion of related psychological constructs and the presentation of suggestive neural findings, based on the existing literature. We conclude with some suggestions for future research.