The Evolution of Cooperation in Food Buying Clubs

Transcript

1. Dr. Timothy M. Waring Associate Professor of Social-Ecological Systems Modeling

   School of Economics, Mitchell Center for Sustainability Solutions University of Maine The Evolution of Cooperation in Food Buying Clubs University of Missouri Evolution and the Social Sciences March 12, 2018 Photo by David Vázquez on Unsplash

2. outline • cooperation in evolutionary context • cooperatives as a

   model organization • how cooperatives have evolved • food club project

3. Cooperation in Evolutionary Context

4. Coordination Collective Action Cooperation Altruism

5. Social Dilemma Prisoner’s Dilemma Player B Cooperate Defect Player A

   Cooperate 2 , 2 0 , 3 Defect 3 , 0 1 , 1 Cooperation is a puzzle Payoffs to ( A , B ) 2 , 2 0 , 3 3 , 0 1 , 1

6. Cooperation Evolves Nowak, M. A. (2006). Five Rules for the

   Evolution of Cooperation. Science • Reciprocity (direct or indirect) • Kin groups • Groups (group selection)

7. Group selection favors group strategies (you can do better by

   teaming up)

8. Going global: How humans conquered the world. The New Scientist,

   2007 Mathew, S. and Perreault, C. (2015) Behavioural varia,on in 172 small-scale socie,es indicates that social learning is the main mode of human adapta,on, Proceedings of the Royal Society B, 282 (1810), p. 61.

9. 2018 Dorling Kindersley

10. !kung technology

11. Inuit technology

12. Social Dilemma Prisoner’s Dilemma Player B Cooperate Defect Player A

    Cooperate 2 , 2 0 , 3 Defect 3 , 0 1 , 1 Humans change the game Payoffs to ( A , B ) Coordination Game Stag Hunt Player B Stag Hare Player A Stag 2 , 2 0 , 1 Hare 1 , 0 1 , 1

13. Group selection on genes & culture Henrich, J. (2004). Cultural

    group selection, coevolutionary processes and large-scale cooperation. Journal of Economic Behavior and Organization, 53(1), 3–35.

14. cooperation as a signature human adaptation group cooperative instincts

15. • docility, prosociality • specialization • language • cooperative breeding

    • technology • conformity • reputation • social marking • ethnocentrism • xenophobia Biological adaptations to life in social groups }negative factors e.g. see: Choi, Bowles, 2007. The coevolution of parochial altruism and war. Science 318, 636–640.
16. None

17. Human Organizational Diversity

18. The European Union

19. model organization cooperatives as a

20. coopera=ves • collective decision-making • collective ownership • collective benefit

    "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise" International Cooperative Alliance, 2016

21. cooperatives as the ancestral organization ancestral cooperatives private enterprise religion

    government modern cooperatives ? share- holding shared derived features ? ? ? ?

22. cooperatives as a model organization • all organizations require cooperation

    • cooperation central to human uniqueness • cooperatives fundamentally depend cooperation • positive social externalities • emerge in harsh economic conditions

23. Why is the cooperative market share so small? 4.3% global

    GNP 7% Europe Global Census on Co-operatives, UN, 2014 PROBLEM

24. HYPOTHESIS Coopera,ves rely on coopera,on more than other organiza,onal types.

    • Free-riding should be observable. • Free-riding should some=mes cause failure (organiza=onal death). • Successful coopera=ves should exhibit more coopera=on than equivalent ‘non-coop’ organiza=ons. • Successful coopera=ves will some=mes hold ins=tu=onal adapta=ons which stabilize coopera=on.

25. (part of) How Coopera,ves Evolved modern coopera=ves small to large,

    formal, codified, legal status, businesses in modern na=on state economies ancestral "coopera=ves" small, informal, uncodified, pre- money, pre-state One Angel Square, CCBY2.0, wikimedia commons Zeyn Afuang on Unsplash

26. Rochdale Society of Equitable Pioneers Toad lane coop Rochdale the

    first modern, codified coopera,ve

27. organiza=onal descent ‣ 1844 - Rochdale Society of Equitable Pioneers

    ‣ 1863 - North of England Co-opera=ve Wholesale Industrial and Provident Society ‣ 1872 - Co-opera=ve Wholesale Society ‣ 2001 - The Co-opera=ve Group The Co-operative Group One Angel Square, CCBY2.0, wikimedia commons

28. institutional descent with modification Rochdale Pioneers 1844 • …to form

    arrangements for the benefit of its members… • …for the promotion of sobriety, a temperance hotel be opened in one of the Society’s houses as soon as convenient. bits... Fairbairn, 1994

29. Fairbairn, 1994 institutional descent with modification

30. Fairbairn, 1994

31. ICA revision, 1966 1. Open, voluntary membership. 2. Democratic governance.

    3. Limited return on equity. 4. Surplus belongs to members. 5. Education of members, officers, public. 6. Cooperation between cooperatives. Fairbairn, B. (1994). The Meaning Of Rochdale: The Rochdale Pioneers And The Co- Operative Principles (Occasional Papers No. 31778). University of Saskatchewan, Centre for the Study of Co-operatives institutional descent with modification

32. institutional descent with modification ukscs.coop PhD Student Taylor Lange

33. Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions

    for Collective Action. Cambridge University Press. Elinor Ostrom Courtesy of Indiana University Institutional Design Principles 1. Clear social boundaries 2. Fair rules 3. Collective-choice 4. Monitoring 5. Graduated sanctions 6. Conflict resolution 7. Self determination 8. Nested governance Wilson, Ostrom, & Cox, 2013. Generalizing the core design principles for the efficacy of groups. Journal of Economic Behavior & Organization 90, 21– S32. are group cultural adaptations:

34. Global Diversification Sector Coops Members Assets Annual Gross Banking/Credit Unions

    210,559 703,070,123 $11,262,671,499,563 $167,413,448,242 Insurance 3,644 248,864 $7,500,074,558,634 $1,219,472,098,520 Agriculture/Grocery 122,120,167 $133,811,867,460 U,li,es 1,714 19,858,921 $141,544,317,085 $41,944,022,702 Grocery/Consumer 81,437 97,869,940 $243,888,763,326 $154,573,071,133 Worker 84,799 4,369,600 $1,393,874,620 $124,821,200,417 Housing 15,247 16,383,048 $52,405,481,487 $20,709,518,041 Health 1,700 3,441,221 $485,789,252 $4,075,077,199 Educa,on & Social 21,876,052 $840,678,955 Purchasing or Marke,ng 41,865 26,256,054 $239,000,352,255 $736,631,647,399 Other or Undefined 760,985 56,296,177 $31,310,913,789 $143,245,072,152 GLOBAL TOTAL 1,071,790,167 $19 Trillion $3 Trillion Global Census on Co-operatives, UN, 2014

35. HYPOTHESIS Coopera,ves rely on coopera,on more than other organiza,onal types.

    • Free-riding should be observable. • Free-riding should some=mes cause failure (organiza=onal death). • Successful coopera=ves should exhibit more coopera=on than equivalent ‘non-coop’ organiza=ons. • Successful coopera=ves will some=mes hold ins,tu,onal adapta,ons which stabilize coopera=on.

36. The Food Club Project • Surveys & Interviews • Behavioral

    Experiments • Simula=on • Social Network Analysis

37. Coopera,ve Food Buying Clubs ! Portland area ! Local food

    entrepreneur ! Internet Farmer - Marketing & online ordering for local food. ! BuyingClubSoftware.com ! Buying Clubs - groups of people who join together to purchase food in bulk, for price savings and access special foods. Jeremy Bloom Founder, BuyingClubSoftware.com

38. Splits

39. Buying Club So_ware

40. interviews Natasha’s Story: • founder and leader of a buying

    club (using buyingclubsoeware) • club lasted: 2009 - 2015 • she remained leader, 4-6 hrs/wk • 3 roles grew to 15 jobs, more coopera=on with larger size • open door policy too costly • “had to make joining harder” -> caused club to shrink • personality fric=on, differing visions, bending of rules • kids, space -> Natasha leaves, 1yr later it’s dead 1-Free-riding is observable. 2-Free-riding might have caused failure.

41. Survey - 9 buyingclubsoftware.com clubs - 98 participants - 3.5

    months: Nov 2016 - Mar 2017 - 25-70 questions (members & coordinators) - Perceptions & experience - Preferences & satisfaction - Club history, organization & operation - Demographics Design & Implementa,on

42. Survey Results Ordering - 54.3% purchases shared - 71% of

    purchases were local - 50% of coordinators believe more sharing would benefit the group Preferences - 33% joined to save money on food - 84% joined to support local producers Demographics - Mean HH income: 65,000, HH size: 3 - 63% bachelor’s or higher - 95% female

43. Frequency of helping others via split purchases. Mean = 60%

    Frequency of receiving help via split orders. Mean = 47% helping getting help

44. 3 behavioral experiments

45. Coopera=on in Food Co-opera=ves ! Are food co-operatives more cooperative

    (than a traditional grocery)? ! Dictator game: Experimental measurement of unenforced fairness, altruism. Ethan Tremblay MA Economics Experiment 1

46. The Dictator Game a measure of coopera=on

47. Coopera,on in Coopera,ve Organiza,ons Blue Hill Food Co-op Blue Hill

    Tradewinds Grocery

48. Results Tremblay & Waring forthcoming ! Tobit Regression model !

    Site effect still dominates ! Even accounting for age, income, sex, education, other variables % difference in contribution $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 | | | | | | | -15% -10% -5% 0% 5% 10% 15% Dollars Donated More Grocery Donations More Co-op Donations Successful coopera,ves should exhibit more coopera,on than equivalent ‘non-coop’ organiza,ons. ✓3

49. HYPOTHESIS Coopera,ves rely on coopera,on more than other organiza,onal types.

    • Free-riding should be observable. • Free-riding should some=mes cause failure (organiza=onal death). • Successful coopera=ves should exhibit more coopera,on than equivalent organiza,ons. • Successful coopera=ves will oeen hold ins=tu=onal adapta=ons which stabilize coopera=on.

50. - #1) One-shot dictator game - #2) One-shot public goods

    game - Within clubs (between members) - Embedded in BCS survey (at start) - anonymous, real money, etc. Experiments 2 & 3 Coopera=on in Buying Clubs

51. Experiment 3 Public Goods Game

52. Results (means) Mean dictator donation: 58% of endowment 107% increase

    from typical (Engel, 2011) Mean public goods donation: 66% of endowment 74% increase from typical (Zelmer, 2003) Elevated levels of cooperation when compared to other study populations

53. HYPOTHESIS Coopera,ves rely on coopera,on more than other organiza,onal types.

    • Free-riding should be observable. • Free-riding should some=mes cause failure (organiza=onal death). • Successful coopera=ves should exhibit more coopera=on than equivalent ‘non-coop’ organiza=ons. • Successful coopera=ves will oeen hold ins=tu=onal adapta=ons which stabilize coopera=on.

54. Buying Club Simula,ons Can the success or failure of buying

    clubs be explained by generalized reciprocity between members in split purchases?

55. ! Cooperation maintained by reciprocity (Trivers, 1971). ! Generalized reciprocity

    between members on shared purchases (splits) ! Preferences vary, requires cooperation. ! Agents record the ratio of the help they’ve received versus given. ! Use ratio to determine two choices: help/don’t, and stay/leave Buying Club Simulations
56. None
57. None

58. Parameters

59. Calibration on splits… F=~0.7

60. Calibration on members F=~0.7

61. Buying Club Predictions Cooperative momentum Generalized reciprocity Out of sample

    prediction?

62. social network analysis ! Order data: who bought what !

    Orders occur every week to every month ! 2012 - 2017 ! 27 Buying Clubs ! Clubs range from 10 to 150 members

63. Social Network Analysis What characterizes the splitting networks of successful

    or failing clubs? Are there structural early warning signs of failure?

64. Is there split threshold below which clubs die? Can high

    split ratios be sustained? Buying Club Purchase Data

65. peak death Organiza,onal Transi,ons actual buying club

66. food coopera,ve store Organiza,onal Transi,ons actual buying club

67. Do network features dis,nguish healthy and failing clubs? Yes!

68. So What?

69. 1. Evolu=onary approach is useful for understanding organiza=onal change (coopera=on,

    diversifica=on, adapta=on). 2. All organiza=ons rely on coopera=on & human prosocial ins=ncts. 3. Coopera=ves are a good model organiza=on because they are vulnerable to the challenge of coopera=on. 4. Coopera=ves may be considered the ancestral human organiza=on. Evolu,on of organiza,ons

70. 1. Coopera=ves rely on coopera=on more than other types of

    organiza=on. 2. Free-riding is a perpetual problem for coopera=ves. 3. Successful coopera=ves have ins=tu=onal adapta=ons which help solve the free-rider problem. 4. The coopera=ve principles are (were?) and example of such an adapta=on. 5. Coopera=ves tend to be out-competed by compe=tors with fewer internal challenges. 6. Coopera=ves tend to emerge in harsh economic environments because that’s how humans solve problems. Evolu,on of coopera,ves

71. our team

72. Thank You! Photo by neonbrand on unsplash