Reciprocity, Materialism and Welfare: An Evolutionary Model

This paper analyses preference evolution in a bargaining situation. We show <p> that preferences for reciprocity, that sustain a conflict-free outcome, are viable <p> if players have enough information about opponents’ preferences. However, depending <p> on the initial starting point, preference evolution can in general both <p> enhance or reduce subjective and material welfare, relative to the situation where <p> all players have the usual materialistic preferences.