In the real world, when people play games, they often receive advice from those that have played it before them. Such advice can facilitate the creation of a convention of behavior. This chapter studies the impact of advice on the behavior of subjects who engage in a non-overlapping generational ultimatum game where, after a subject plays, she is replaced by another subject to whom she can offer advice. Our results document the fact that allowing advice fosters the creation of a convention of behavior in ultimatum games. In addition, by reading the advice offered, we conclude that arguments of fairness are rarely used to justify the offers of senders but are relied upon to justify rejections by receivers.

Social learning describes any situation in which individuals learn by observing the behavior of others. In the real world, however, individuals learn not just by observing the actions of others, but also learn from advice. This chapter introduces advice giving into the standard social learning experiment of Çelen and Kariv (2005). The experiments are designed so that both pieces of information action and advice are equally informative (in fact, identical) in equilibrium. Despite the informational equivalence of advice and actions, we ... find that subjects in a laboratory social-learning situation appear to be more willing to follow the advice given to them by their predecessor than to copy their action, and that the presence of advice increases subjects’ ’welfare.

The book concludes by drawing out the implications of the overarching theory and findings for the future of democracy. The chapter argues that laissez-faire extremism and genuine democracy cannot coexist indefinitely. The lack of security and stability of the former will continually generate cultural and democratic discontent, intensifying social conflict and creating ideal conditions for charismatic leaders to emerge. We discuss various alternatives to neoliberalism, including the internationalization of tax and social welfare policy and economic democratization. This leads to our second argument: that democracy can best save itself by making itself worth saving. Democracies should answer the challenges of populism and other forms of discontent by ignoring calls for greater democratic elitism (which would only validate discontented narratives). Instead, democratic institutions and actors, especially political parties, should reform and recommit themselves to their role as channels for citizens’ voices.

In this chapter we start by defining an intergenerational game and its equilibria. We then discuss conventions of behavior, their relationship to intergenerational-game equilibria, and what it takes to make such conventions stable. This is followed by describing the relationship between our use of the term “social learning” and what standard economic theory interprets it to mean. At the end of the chapter we discuss two other types of games, dynastic games (Anderlini, Gerardi, and Laguno, 2008) and overlapping generations games (Kandori, 1992), which also have generational structures.

This chapter begins applying the theory to the core cases, starting with Trumpism in the USA and Euroscepticism and Brexit in the United Kingdom. It traces the evolution of the populist radical right in both countries; throughout the process, economic trauma, compounded by inadequate or imprudent political responses to the unfolding crisis, stoked and inflamed cultural tensions. Yet in both cases, discontent failed to break through the political status quo as radical right antecedents like the Tea Party and the UK Independence Party (prior to Farage’s ascension to leadership) failed to embrace their supporters’ cultural radicalism. Only when Trump and Farage began to explicitly connect economics, culture, and politics did radical right populism manage to provoke a rupture. We support these arguments using original survey data in the USA, the British Election Study, and analyses of Trump’s rhetoric.

This chapter serves two primary purposes. First, it establishes the book’s conceptual schema of political discontent. It identifies three ways in which discontent can manifest: against regime institutions (low regime support/regime antipathy), against the political elite (anti-elitism and populism), or even against reality (conspiracism). This section addresses conceptual debates in the study of each type of discontent, selecting or developing definitions according to set criteria. It also discusses the two primary ways discontent can influence behavior: through support for political outsiders and through contentious politics. Second, the chapter summarizes existing approaches to the study of discontent. It discusses shared elements of the global political order, especially neoliberal capitalism, liberal democracy, and more recently multiculturalism. Political discontent varies in form from case to case but is generally shaped by a rejection of one or more elements of this order. Reviewing the scholarship on each subtype of discontent, the chapter finds a recurring debate between economic and cultural origins. Neither approach can fully explain discontent, but neither can be ignored or disproven. As a result, the chapter concludes that a comprehensive theory must synthesize these two approaches.

The willingness to trust others does not just happen. We are taught to trust by those who have lived before us and by observing whether it is safe to do so. We are also schooled in the benefits of trustworthiness. The level of trust existing in a society influences the way life is organized. These concerns raise certain questions that we hope to answer in this chapter. For example, how do we learn to trust each other? Once a convention of trust is created, how is it passed on from generation to generation? Does intergenerational communication increase or decrease trust? Does it increase or decrease trustworthiness? Is trust profitable? What is the causal relationship between trust and trustworthiness? In this chapter we use an intergenerational version of the well-known trust game (Berg, Dickhaut, and McCabe, 1995) to help us answer these questions about how trust is developed and communicated to others. We find that advice seems to decrease the amount of trust that evolves when this game is played in an intergenerational manner in that it decreases the amount of money sent from senders to receivers. Ironically, advice increases trustworthiness in that receivers tend to send more back. However, in no case, on average, does it pay to send any money. We explain this contradiction by examining the asymmetrical impact that advice has when serving as an anchor from which sending and returning behavior is adjusted. Further, we have discovered that subjects appear to follow conventions of reciprocity in that they tend to send more if they think the receivers acted in a “kind” manner, where “kind” means the sender sent more money than the receiver expected. Finally, while we find a causal relationship between trustworthiness and trust, the opposite cannot be established. We note that many of our results can only be achieved using the tools offered by intergenerational games. The intergenerational advice offered provides information not available when games are played in their static form. Combining that information with elicited beliefs of the senders and receivers adds even more information that can be used to investigate the motives that subjects have for doing what they do.

This is a book on advice, its importance for decision making, and its influence on the evolution of conventions of behavior. The idea is simple. As societies progress, old generations of social agents die and are replaced by new ones. We are interested in what happens in this transition as the old guard instructs the new arrivals about the wisdom of their ways. Do new entrants listen to and follow the advice of their elders or dismiss it? Is intergenerational advice welfare-improving or can it be destructive? Many times wise advice is rejected only to have new generations repeat the mistakes of their parents instead of learning from them. The advice offered from one generation to the next allows for a type of social learning that leads to the creation of conventions of behavior.

This chapter describes and justifies the book’s theoretical framework, which proposes that economics influences democratic discontent by fomenting cultural discontent, with emotions connecting economics and culture. After briefly discussing the economic consequences of the Great Recession and the collapse of the commodities boom, it explains the affective intelligence theory (AIT) of emotions. AIT conceptualizes emotions as continuously operating surveillance systems, producing specific motivational and cognitive patterns that are not tied to the situation that aroused them. Given this, the chapter proposes that economic turmoil generates resentment and anxiety, which primes large groups of citizens to become aggressive, hostile toward outgroups, and hyperattentive to threatening information. Individuals so influenced gravitate toward social narratives that emphasize group conflict and prejudice against opposing social groups, thus fomenting cultural discontent. This, in turn, produces democratic discontent. The chapter concludes by discussing various contextual factors that may inhibit or intensify this theoretical process or prevent discontent from manifesting in certain ways.

This chapter tests every step of the book’s theoretical framework using survey experiments. It uses profiles of three hypothetical citizens: Left Leaner, Right Leaner, and Tuned Out. As a narrative device to show how the theory is tested, the chapter then takes these citizens through the steps of our theory using experiments, which use writing exercises, videos, and text vignettes as treatments. The results of these analyses are presented using simple graphs and figures that are relatively understandable for readers with limited statistical expertise. We find that economic discontent does significantly increase populism, regime antipathy, and conspiracism, and that these effects are mediated through cultural discontent, resentment, and (in the case of conspiracism) anxiety, as expected. The chapter further shows that economic discontent increased negative intergroup attitudes, but only among conservatives.