When best-replies are not in Equilibrium: Understanding Cooperative Behaviour

Irenaeus Wolff

No 2013-28, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

Abstract: To understand cooperative behaviour in social-dilemma experiments, we need to understand the game participants play not only in monetary but in preference terms. Does a Nash-prediction based on participants’ actual preferences describe their behaviour in a public-good experiment well? And if not, where does the observed behaviour diverge from the prediction? This study provides an environment which allows to answer these questions: when making their contribution decision, participants are informed about their co-players’ priorly-elicited conditionalcontribution preferences. This induces common knowledge of preferences and thereby leads to direct experimental control over the game participants play. Results show that most people play best-responses to their beliefs. At the same time, beliefs in a third of the cases do not correspond to an equilibrium prediction that is based on the elicited conditional-cooperation preferences. Moreover, more often than not, beliefs are empirically inaccurate. This hods true even in a treatment that gives participants the option to look up the set of equilibria of their game.

Keywords: Public good; social dilemma; Nash-equilibrium; rational beliefs; conditional cooperation; social preferences. (search for similar items in EconPapers)
JEL-codes: C72 C92 D83 H41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2013-12-16
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.uni-konstanz.de/FuF/wiwi/workingpaperseries/WP_28-Wolff_2013.pdf (application/pdf)

Related works:
Working Paper: When best-replies are not in equilibrium: Understanding cooperative behaviour (2015)
Working Paper: When best-replies are not in equilibrium: understanding cooperative behaviour (2013)
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:knz:dpteco:1328

Ordering information: This working paper can be ordered from
https://www.wiwi.uni-konstanz.de/en

Access Statistics for this paper

More papers in Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz Contact information at EDIRC.
Bibliographic data for series maintained by Office Ursprung ( this e-mail address is bad, please contact ).