The Role of Environmental Shocks in Shaping Prosocial Behavior

Samenvatting (Engels)

All economic activity requires some degree of cooperation, and the process of economic development involves many social dilemmas. It is therefore crucial to understand how the preferences which guide our behaviour vis-à-vis these situations are shaped. The ability and willingness to work for the benefit of the group rather than just one's own  has evolved over many generations, and is – to some extent – innate to any healthy human being. At the same time, individual prosocial preferences are – also to a certain extent – endogenous to the physical and social environment within which we operate. I identify several ways in which environmental changes affect intrinsic prosocial preferences, and outline a possible direction for fixing such negative effects. I find that prenatal temperature shocks and stress reduce cooperative behaviour, as do abrupt changes to the institutional environment. I further show that prosocial behaviour can be encouraged by relatively small financial incentives.