Leadership and cooperation in a sequential Prisoner’s Dilemma

Eberhard Feess, Steffen Lippert, Jamie Martini-Tibbs and James Tremewan

European Economic Review, 2025, vol. 180, issue C

Abstract: In a sequential Prisoner’s Dilemma, conditional cooperation creates an incentive to move second. However, choosing to move first can signal strong social preferences, potentially increasing cooperation when players care not only about actions but also about what those actions reveal about their partners’ social preferences. To examine this, we use the psychological game framework to disentangle the effects of observed actions from those of beliefs about partner preferences. The model yields a separating equilibrium in which players with strong social preferences move first. It predicts that endogenous sorting outperforms exogenous sorting when self-selection is hidden. Full transparency about endogenous sorting may backfire if players forced to move first infer selfish motives and defect. Yet, our experimental data show that transparency is optimal: it boosts incentives to move first and raises cooperation among second movers, without reducing cooperation among those compelled to move first. We also find a notable gender difference, as female subjects are more attuned to the signaling value of moving first.

Keywords: Sequential social dilemma; Leadership; Self-selection; Reciprocity (search for similar items in EconPapers)
JEL-codes: C72 C91 D91 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292125002107
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:180:y:2025:i:c:s0014292125002107

DOI: 10.1016/j.euroecorev.2025.105160

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().