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Andreas Flache

Manu Muñoz-Herrera

Explaining social phenomena based on theories about individual behavior.

Lecture Week 4 - Application of TheoriesBlock A 2012/2013

http://manumunozh.wix.com/apptheories



Overview: Covered topicsWhat we should know by now

It’s been 4 weeks

Lecture 1 - Brief intro of the course. Aim of the course: How to apply general theories to specific

research problems This should be done in a scientifically correct way (i.e., Lave and

March model)

Lecture 2 - Explanations and Predictions What are explanations/predictions in the social sciences Criteria that define an adequate explanation (i.e., Hempel and

Oppenheim model)

It’s been 4 weeks

Lecture 3 - Formal Logic How to formulate and test valid arguments How to generalize and specify concepts and statements

Lecture 4 - How to criticize a theory What defines a good explanation (H&O conditions of adequacy) How to criticize a theory (i.e., rational choice theory)

In summary

What is the structure of a scientific explanation of social phenomena? Criteria for when is an explanation a good explanation-

How can we criticize a theory in a fruitful way? Is the theory internally consistent?

Can we logically derive the predictions of the theory from the assumptions?

Does the theory have empirical content?Can the theory generate testable predictions?

Is the theory clearly formulated? Are the concepts in the theory well defined? (e.i., implicit assumptions)

What next?

Specific sort of explanation in the social sciences: natural approach

Starting with assumptions about individual behavior

When thinking about a social phenomena, always start thinking about the individuals that caused it.

Why do individuals do certain things? Why does the interplay of what many individuals do, create the

social phenomena we observe and are interested in explaining?

ExampleResidential segregation

Example 1: Residential Segregation

http://www.nrc.nl/nieuws/2012/02/14/statistiek-saai-cbs-cijfers-komen-tot-leven-op-een-kaart/

Proportion of niet-westerse allochtonen (non-western immigrants)

The case of Amsterdam

Think about how do you expect to see the map colored?

The Netherlands has a particular way to trace in great detail the residential composition: The postal code (four digits + two letters). This reduces the composition to units of about 15 households.






How about Groningen?

Think about how do you expect to see the map coloredin Groningen?

There is few well-mixed composition, mainly blue (very western) and red (very non-western)

There is residential segregation


Does high levels of segregation in a city show that people want segregated neighborhoods?

And, can mapping segregation in a city tell us why there is segregation and what can we do about it?

This is an important social phenomenon to be explained There are political, social, economic implications from it

Example 1: Schelling’s model of residential segregationObserved phenomenon:There is residential segregation Why is there residential segregation?

Speculation:

People are xenophobic, and xenophobic people choose to segregate

Or, if considering our phenomenon is the result of an underlying process:

Does residential segregation show that people are xenophobic?

http://ccl.northwestern.edu/netlogo/models/SegregationNetLogo model library - Model: Segregation

What other explanations could there be?

http://ccl.northwestern.edu/netlogo/models/Segregation

http://ccl.northwestern.edu/netlogo/models/Segregation

Example 1: Schelling’s model of residential segregation

Even if people don’t want to live in segregated neighborhoods it will emerge as a consequence of individual behavior.

Even if there are no other mechanisms into consideration (i.e., house pricing, income inequality, and off course preferences)

This can be observed in other places, such as the U.S.

Empirical Results on residential preferences in U.S.

Clark and Fosset, 2008

The individual level: Empirical results on residential preferences in U.S.

Data from “Metropolitan Study of Urban Inequality”

Clark and Fosset, 2008

Their summary:

“The most common response sets for ideal neighborhoods are in the range of majority or near majority same-group presence.”

Data from Metropolitan Study of Urban Inequality

“The most common response sets for ideal neighborhoods are in the range of majority or near same-group presence”

What have we seen?

The interplay of individual actions can bring about, at the social level, something that is not really a one-to-one translation.

It is not straightforwards to say that because individuals can be satisfied with integrated neighborhoods, there will be integrated neighborhoods

This is a very important starting point to think about the difference between

collectivistic and individualistic explanations in the social sciences.

Aims of the lecture

In this lecture we will:

Understand the differences between a collectivistic and an individualistic explanation.

Learn how to construct individualistic explanations of collective phenomena.

Understand the concept of emergence.

Part 1: Collectivistic and Individualistic explanations

Phenomena in Sociology

Sociology is concerned with macro phenomena

Macro phenomena describe collectivities such as groups, organizations, neighborhoods, cities, countries, societies.

They are distinguished from individual (micro) phenomena which are studied by psychologists.

Examples cover phenomena such as gross domestic product, birth rate, income inequality, social movements (political protest), opinion polarization, voter turnout (percentage of voters going to the elections):

We try to understand: Which factors influence this, or which factors are influenced by this?

Phenomena in Sociology

Structural approach to Sociology

The “whole does not equal the sum of its parts; it is something different, whose properties differ from those displayed by the parts from which it is formed” (Durkheim 1982:128)

Durkheim Concluded

“The determining cause of a social fact must be sought among antecedent social facts and not among the states of the individual consciousness” (Durkheim 1982:134)

Émile Durkheim1858-1917

Macro-level Macro-leveldetermine

Collective phenomena can and should only be explained with other collective phenomena.

Typical Example: Durkheim’s theory of social differentiation (Explained by Turner 1995:20) - In the process of modernization societies became increasingly differentiated (societies became more complex): in terms of structure of norms, educational systems.

The structural or collectivistic approach

The structural or “collectivistic” approach

• Collective phenomena can and should only be explained with other collective phenomena.

• This is a typical example from Durkheim’s work (explicated by Turner 1995: 20): Durkheim’s theory of social differentiation

All phenomena which are argued to causally influence differentiation are collective phenomena

All phenomena which are argued to causally influence differentiation, are collective phenomena.

In the collectivistic approach, if you want to really understand a social phenomena, you should not look into individual behavior.

What is wrong about this?

Nothing! if...


Structural explanations can be formulated according to the conditions of adequacy (week 2)

But...


However, collective phenomena can also be explained on assumptions about individual behavior (individualistic explanation)

This is possible even though we accept that “the whole does not equal the sum of its parts” (Durkheim 1982:128)

What is more, the structural-individualistic research program (SIR) holds that explanations of collective phenomena should be based on theories about individuals

Easier to explain why social structures, norms, etc., change Easier to explain why macro-relationships differ between contexts

The structural-individualistic research program

SIP holds that collective phenomena can and should be explained by drawing on the micro-level.

One of the first sociologists to propose SI explanation: George Homans

Basic model: the Coleman boat (see also McClelland, 1961).

George C. Homans1910-1989

James S. Coleman1926-1995

David C. McClelland1917-1998

The structural-individualistic research program

Improved social

conditionsRevolution

Frustration Aggression

Macro level

Micro level

The name: structural-individualistic research program states that the main interest is not explaining what individuals do in detail (i.e., why did Tom participated in the protest?)

The interest relies in explaining macro-level social phenomena from theories about individual behavior.

Arguably this happened in the Arab world

Individualistic theorizing in social sciences

Outside sociology: classical economics uses individualistic core assumptions for more than 200 years.

Human beings are self-interested People choose the action alternative that maximizes their goal-achievement Elaborated as formal (mathematical) theory in neoclassical economics and later in

game theory

Homo Economicus

Individualistic theorizing in social sciences

In sociology: Around 1960 G. C. Homans:

There are no stable social facts (i.e., the things at the macro level)

But there is a stable thing along history: human nature (behaviorism)

Lets consider as a starting point the thing that does not change (that much), human nature, and use it to explain why in different contexts we find different macro phenomena.

Hence: Explanations of social facts can best be derived from assumptions about human nature plus knowledge about the specific conditions under which humans act

Hempel and Oppenheim model - law-like assumptions and specific conditions

The rational choice approach

Later (1980’s): rational choice theory.

Take the model of man from neoclassical economics, import it to sociology, but enrich it and apply it to social phenomena outside de market

Since the 1980’s it has increasingly been elaborated to include more realistic behavioral assumptions:

Behavioral game theory (Tutorial 5) Homo reciprocans rather than homo economicus (i.e., Ernst Fehr)

Core assumption: The higher the perceived utility of a course of action, the more likely an individual will choose this action

Part 2: Constructing individualistic explanations of collective phenomena

Main elements of an individualistic explanation (i.e., Coleman, Lindenberg)

IndependentMacro-variable

DependentMacro-variable

Input individual choice: Choice options Information Costs and benefits...

Output: Individual choice

Explanandum: Macro relationship

Theory of action

Bridge assumptions

Transformation assumptions

Example: Differences in criminal behavior between states in the US

There are very substantial differences between states:

National average in the US is: 4.8/100.000 in 2010

Louisiana: 11.2/100.000 New Hampshire: 1.0/100.000

Why are there differences in the criminal behavior (i.e., homicide, murder) between states in the US?

From the RCT perspective: Why?

Think about, why would someone commit a murder?

From the RCT perspective: Why?

Think about, why would someone commit a murder?

From RCT we can consider the relation between costs and benefits:

If the benefit of committing a murder is greater than the costs, individuals will commit a murder.

Maybe it’s harder to assess the benefit side than the cost side of this!

One possible explanation: severity of punishment and likelihood to be punishedExample:Association between murder rate and other properties of US states (around 1970)

One possible explanation: severity of punishment and likelihood to be punished

Example:

Association between murder rate and other properties of U.S. states (around 1970).

Source:

Parker & Dwayne-Smith. 1979. American Journal of Sociology.

Pearson correlation coefficients

Severity of punishment

Likelihood of punishment

Severity of the punishment

Likelihood of punishment

Pearson correlation coefficientsSource: Parker and Dwayne-Smith, 1979. American Journal of Sociology

Elaboration of an individualistic explanation (graphically)

Severity punishmentstate Murder rate

Likelihood punishmentstate

Perceived costs of committing a murder

Probability that an individual will commit murder

+ +

-

Macro

Micro

Elaboration as argument

The higher the perceived utility of a course of action, the more likely an individual will choose this action (theory of action).

Definition: The perceived utility of an action is the difference between the perceived benefits and the perceived costs

The higher the difference between the perceived benefits and the perceived costs of a course of action, the more likely an individual will choose this action(ceteris paribus= assuming perceived benefits/costs of alternative actions are equal)

Committing murder is an action

The higher the difference between the perceived benefits and the perceived costs of committing murder, the more likely an individual will commit murder (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

Elaboration as argument (2)

The more severe the punishment for murder is in a state (of the US), the lower is the difference between perceived benefits and perceived costs of committing a murder in that state (bridge assumption)

The higher the difference between the perceived benefits and the perceived costs of committing murder, the more likely an individual will commit murder (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

The more severe the punishment for murder is in a state (of the US), the less likely an individual will commit murder in that state (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

Elaboration as argument (3)

The less likely individuals in a state commit murder, the lower the murder rate in that state (transformation assumption)

The more severe the punishment for murder is in a state, the less likely an individual will commit murder in that state (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

The more severe the punishment for murder is in a state, the lower the murder rate in that state (ceteris paribus = assuming perceived benefits/costs of alternative actions are equal)

This is what was tested by the regression analysis in the table shown before Same structure can be used for the likelihood of punishment

But then... something to think about

The more severe the punishment for murder is in a state, the lower the murder rate in that state

&

Death penalty is the most severe punishment there is

Prediction: In states with death penalty the murder rate is lower

Average murder rate for states with/without death penalty: 2010: with death penalty 4.6, without 2.9 2009: with death penalty 4.9, without 2.8 2008: with death penalty 5.2, without 3.3 Source: http://www.deathpenaltyinfo.org

Why??? How to improve the explanation?

http://www.deathpenaltyinfo.org

http://www.deathpenaltyinfo.org

What to do if you make wrong predictions? There is a heuristic.

Reconsider your bridge assumption(s) Did you consider all effects of the independent macro condition on costs/

benefits/beliefs, etc. of the individual actor?





Bridge assumptions

What to do if you make wrong predictions?

Reconsider your transformation assumption(s) E.g., do individual actions really simply add up? What is the role of e.g., threshold effects, social networks...?





Transformation assumptions

What to do if you make wrong predictions?

Reconsider your model of action Did you considered all possible actions? Is the rational choice core assumption justified?





Theory of action

Example 1:

Amos Tversky1937-1996

Daniel Kahnemann1934

Nobel Prize 2002

A famous experiment

Condition 1:

Imagine that the US is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the program are as follows:

If program A is adopted, 200 people will be savedA

BIf program B is adopted, there is a one-third probability that 600 people will be saved and a two-third probability that no people will be saved

Which of the two programs would you favor?

Condition 1: Answer

If program A is adopted, 200 people will be savedA

BIf program B is adopted, there is a one-third probability that 600 people will be saved and a two-third probability that no people will be saved

72% of the subjects chose A (N=152)

Stop and think...

What would we have predicted here using the rational choice theory of action?

Core assumption: The higher the perceived utility of a course of action, the more likely an individual will choose this action

We need more definitions: what is perceived utility?

Theory 1: Expected utility theory

The perceived utility of an action is the likelihood with which the action leads to a certain outcome times the value of that outcome for the individual

Perceived utility program A=? Perceived utility program B=?

Prediction expected utility (theory 1)

Assuming value= number of people saved, then both programs have the same expected utility

A= 200 saved; B= 1/3(600)saved + 2/3(0)saved = 200 saved

People should be indifferent between A and B, the distribution of choices should be about 50/50

But this is wrong. Why? How can we improve the theory?

Adding risk preferences (theory 2)

We add an assumption to rational choice theory: people have risk preferences, and usually they are risk averse.

A bird in the hand is better than two birds in the bush

Or: for any three prizes A<B<C, risk averse people prefer B over a lottery with A and C as possible wins and with expected payoff = B.

This explains why most people choose program A in condition 1 of the experiment of Kahnemann adn Tversky

Condition 2:

Imagine that the US is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the program are as follows:

If program C is adopted, 400 people will dieC

DIf program D is adopted, there is a one-third probability that nobody will die and a two-third probability that 600 people will die

Which of the two programs would you favor?

Condition 2: Answer

78% of the subjects chose D (N=155)



The decision problems are identical with regard to expected payoffs and the risk involved. So both Theory 1 and Theory 2 cannot explain this result.

Condition 2: Answer

78% of the subjects chose D (N=155)



The decision problems are identical with regard to expected payoffs and the risk involved. So both Theory 1 and Theory 2 cannot explain this result.

The different framing (save lives vs. loose them) of the effects leads to different decisions

Theory 3 (Prospect theory)

Kahnemann and Tversky proposed that people are risk-averse in gains (i.e., actions that can improve the status quo) and risk-seeking if it comes to avoiding losses

With these three steps we have not abandoned the rational choice model of action, but we have made it more sophisticated

People are more likely to choose the actions with more expected utility, but

In gains: expected utility of a risky gamble is lower than for a certain gain with same expected value, and

In losses: expected utility of a risky gamble is lower than for a certain gain with same expected value

Currently, is there something better?

Much current research focuses on further elaborating the theory of rational action and making it more realistic as model of real human decision making:

Different decision rules (bounded rationality)

Social preferences (fairness)

Include further assumptions about the perceptions of risk

Example 2:

Karl Marx1818-1883 Mancur Olson

1932-1998

Marx’s theory of revolution


Also Karl Marx developed a macro theory of the evolution of societies

These are the core assumptions (see Turner 1991):

All human societies are organized according to the ownership of property

All societies (except communistic societies) are characterized by class conflict (=tension between “interest groups”)

When classes become aware of conflicting interests, they form revolutionary political organizations and fight.


The more subordinate segments of a system are aware of their collective interests [...] the more likely they are to join in overt conflict against dominant segments of a system (Turner 1991:188).

From a macro perspective this makes sense: the bigger the interest group is, the more likely there will be conflict

However, from an individualist’s perspective, you would not expect this (see e.g., work by Mancur Olson)

Olson argued that collective action (i.e., protest) is less likely in big groups. Why?

A core assumption is the following

Olson’s theory of collective action

Individuals have incentives (g>0) to participate in collective action (i.e., dissatisfaction, more rights, increase in wealth...)

Participating in collection action is always costly (c>0)

Individuals will participate in collective action when they believe that the utility they derive from their individual contribution exceeds the cost of participation

Problem: the bigger an interest group is, the smaller is the impact i of each member (i.e., the bigger a demonstration, the smaller is the impact of a single protestor)

Key assumptions:

U(participation)= g ·i - c < 0

Expected gain (small for small influence i) Cost of participation

Nevertheless, we know that people often participate in protest. Olson came up with a solution:

Rational actors will participate if there are sufficiently strong selective incentives

More rights and increase in wealth are collective incentives in the sense that all members of the population can consume them even if they did not participate in the production of the collective good

Selective incentives, in contrast, are consumed only by those individuals who participated in the production of the collective good (those who protested)

Olson argued that for instance social (social norms) and moral (people feel obliged) incentives might play a role


Thus, Olson’s analysis suggests that one should reformulate Marx’s assumption:

The more subordinate segments of a system are aware of their collective interests [...] the more likely they are to join in overt conflict against dominant segments of a system (Turner 1991:188).

If classes provide sufficient selective incentives to motivate individuals, then: The more subordinate segments of a system are aware of their collective interests [...] the more likely they are to join in overt conflict against dominant segments of a system (Turner 1991:188).

Thus, the micro analysis has provided new information which we might have overlooked had we based expectations only on macro theory


Part 3: The concept of emergence

In the Schelling model (reading and initial example), we found segregation even though we did not assume that individuals did want to live in segregated neighborhoods.

Emergence

Collective phenomena which are unintended in the sense that individuals do not seek to create them, are called emergent phenomena.

Note that there are many definitions of emergence. The core of these definitions is that the interplay of individual behavior can create patterns which cannot be directly inferred from motives of the individuals (see also the discussion by Hempel and Oppenheim)

Spatial segregation, even though individuals seek to live in misxed areas (see Schelling reading this week)

Synchronized clapping

Lane formation of pedestrians

Opinions may polarize even though individuals do not seek to hold different opinion than others

Herding behavior (market bubbles and crashes...)

Examples of emergence in the social sciences

In a sense, Durkheim was correct when he claimed that the whole does not equal the sum of its parts (Durkheim 1982:128).

In other words, there are collective phenomena which are not necessarily the consequence of individual motives.

However, Durkheim’s conclusion that collective phenomena can only be explained by other collective phenomena is not correct.

There are many theories which explain collective phenomena based on assumptions about individual behavior

In addition, the examples demonstrate that micro level theories have the potential to provide information that we might have overlooked had we focused on the collective level.

Emergence: Summary

A core assumption and one of the most fascinating and most difficult problems of Sociology is the interplay between micro and macro:

Macro structures can emerge from micro behavior, but then

... they in turn affect micro behavior (bridge assumptions)

We can thus not simply extrapolate social outcomes from individual behavior, nor we can infer individual behavior from social outcomes that we see

We need carefully constructed theories that make all elements of the micro-

macro interplay explicit bridge assumptions theory of action assumptions about transformation

The micro-macro problem

Read the corresponding chapter in your reader and do the assignment in Nestor.This is assignment will be graded!

Assignment