Hamilton's rule in economic decision-making

Moshe Levy*, Andrew W. Lo

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

Hamilton's rule [W. D. Hamilton, Am. Nat. 97, 354-356 (1963); W. D. Hamilton, J. Theor. Biol. 7, 17-52 (1964)] quantifies the central evolutionary ideas of inclusive fitness and kin selection into a simple algebraic relationship. Evidence consistent with Hamilton's rule is found in many animal species. A drawback of investigating Hamilton's rule in these species is that one can estimate whether a given behavior is consistent with the rule, but a direct examination of the exact cutoff for altruistic behavior predicted by Hamilton is almost impossible. However, to the degree that economic resources confer survival benefits in modern society, Hamilton's rule may be applicable to economic decision-making, in which case techniques from experimental economics offer a way to determine this cutoff. We employ these techniques to examine whether Hamilton's rule holds in human decision-making, by measuring the dependence between an experimental subject's maximal willingness to pay for a gift of $50 to be given to someone else and the genetic relatedness of the subject to the gift's recipient. We find good agreement with the predictions of Hamilton's rule. Moreover, regression analysis of the willingness to pay versus genetic relatedness, the number of years living in the same residence, age, and sex shows that almost all the variation is explained by genetic relatedness. Similar but weaker results are obtained from hypothetical questions regarding the maximal risk to her own life that the subject is willing to take in order to save the recipient's life.

Original languageAmerican English
Article number2108590119
JournalProceedings of the National Academy of Sciences of the United States of America
Volume119
Issue number16
DOIs
StatePublished - 19 Apr 2022

Bibliographical note

Publisher Copyright:
© 2022 the Author(s).

Keywords

  • Hamilton's rule
  • altruism
  • evolution
  • experimental economics

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