On the nature, modeling, and neural bases of social ties.

PURPOSE This chapter addresses the nature, formalization, and neural bases of (affective) social ties and discusses the relevance of ties for health economics. A social tie is defined as an affective weight attached by an individual to the well-being of another individual ('utility interdependence'). Ties can be positive or negative, and symmetric or asymmetric between individuals. Characteristic of a social tie, as conceived of here, is that it develops over time under the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is not related to strategic behavior such as reputation formation but seen as generated by affective responses. METHODOLOGY/APPROACH A formalization is presented together with some supportive evidence from behavioral experiments. This is followed by a discussion of related psychological constructs and the presentation of suggestive existing neural findings. To help prepare the grounds for a model-based neural analysis some speculations on the neural networks involved are provided, together with suggestions for future research. FINDINGS Social ties are not only found to be important from an economic viewpoint, it is also shown that they can be modeled and related to neural substrates. ORIGINALITY/VALUE OF THE CHAPTER By providing an overview of the economic research on social ties and connecting it with the broader behavioral and neuroeconomics literature, the chapter may contribute to the development of a neuroeconomics of social ties.