For many years, economic theory has ignored the existence of altruism. Yet there is growing evidence to suggest that many people are by nature altruistic, i.e., they wish to help those in need and by this means contribute to the common good. That said, there is much individual heterogeneity in this human behavior, and the interaction between altruists and selfish individuals is vital to human cooperation. Further, the strength of altruism and its consequences depends very much on the prevailing cultural and institutional conditions, and there are times when almost no one will act disinterestedly even though altruism is widespread. In his talk, Ernst Fehr will show why and how these paradoxical situations arise, and when it is likeliest for altruistic motives to guide our behavior in the markets, within organizations and in political life.
Deputy Director, Center for Monetary and Financial Studies (CEMFI)