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

<b>Purpose:</b><br>This paper addresses the nature, formalization, and neural bases of (affective) social ties anddiscusses the relevance of ties for health economics. A social tie is defined as an affectiveweight attached by an individual to the well-being of another individual ('utilityinterdependence'). Ties can be positive or negative, and symmetric or asymmetric betweenindividuals. Characteristic of a social tie, as conceived of here, is that it develops over timeunder the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is notrelated to strategic behavior such as reputation formation but seen as generated by affectiveresponses.<br><b>Methodology/approach:</b><br>A formalization is presented together with some supportive evidence from behavioralexperiments. This is followed by a discussion of related psychological constructs and thepresentation of suggestive existing neural findings. To help prepare the grounds for a modelbasedneural analysis some speculations on the neural networks involved are provided, togetherwith suggestions for future research.<br><b>Findings:</b><br>Social ties are not only found to be important from an economic viewpoint, it is also shownthat they can be modeled and related to neural substrates.<br><BR>This discussion paper has resulted in a chapter in <A HREF="http://www.amazon.com/Neuroeconomics-Advances-Economics-Services-Research/dp/1848553048">'Neuroeconomics - Advances in Health Economics and Health Services Research'</A>, 2008, 20, 125-59.