Mike D commented on this post:
Let’s think about two axes here. On the x axis, put altruism (the weight my assessment of your utility has in my utility function) and on the y axis, put respect (if I assess your situation using my utility function, respect = 0, if I assess your situation using what I think is your utility function, put respect =1, and interpolate between these two).
It seems obvious why altruism decreases with distance/dissimilarity. I would submit that respect is more subtle.
1) Proximity decreases respect, as I may suffer alleged externalities (real, pecuniary, or psychic) from your choices, so I have a selfish motive to override your preferences.
2) Proximity also increases respect, because your internal emotional life becomes more real and vivid to me, instead of a highly abstracted model.
So the utility function looks like this:
where big U is total utility for the individual, little u is his Robinson Crusoe utility, little v is the other person’s utility, x is the individual’s consumption and y is the other person’s consumption. According to Mike D, the parameter’s of that utility function behave like this:
There has to be some experiment, natural or otherwise, that would let us estimate these parameters and see how they vary with social distance.