Social Preferences and the Variability of Conditional Cooperation

Malte Baader, Simon Gächter, Kyeongtae Lee and Martin Sefton
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Kyeongtae Lee: Bank of Korea

No 2024-04, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We experimentally examine how incentives affect conditional cooperation (i.e., cooperating in response to cooperation and defecting in response to defection) in social dilemmas. In our first study, subjects play eight Sequential Prisoner’s Dilemma games with varying payoffs. We elicit second mover strategies and find that most second movers conditionally cooperate in some games and free ride in others. The rate of conditional cooperation is higher when the own gain from defecting is lower and when the loss imposed on the first mover by defecting is higher. This pattern is consistent with both social preference models and stochastic choice models. In a second study subjects play 64 social dilemma games, and we jointly estimate noise and social preference parameters at the individual level. Most of our subjects place significantly positive weight on others’ payoffs, supporting the underlying role of social preferences in conditional cooperation. Our results suggest that conditional cooperation is not a fixed trait but rather a symptom of the interaction between game incentives and underlying social preferences.

Keywords: sequential prisoner’s dilemma; conditional cooperation; social preferences (search for similar items in EconPapers)
Date: 2024-04
New Economics Papers: this item is included in nep-exp, nep-gth, nep-inv and nep-soc
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Related works:
Working Paper: Social Preferences and the Variability of Conditional Cooperation (2022)
Working Paper: Social Preferences and the Variability of Conditional Cooperation (2022)
Working Paper: Social preferences and the variability of conditional cooperation (2022)
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