Abstract
We have participants play two sets of repeated Prisoner’s Dilemma (RPD) games, one with a large continuation probability and the other with a small continuation probability (stage game payoffs and continuation probabilities are common knowledge). We find that, regardless of which is played first, participants typically cooperate when the continuation probability is large and defect when the continuation probability is small. However, there is an asymmetry in behavior when transitioning from one continuation probability to the other. When switching from large to small, transient higher levels of cooperation are observed in the early games of the small continuation set. Conversely, when switching from small to large, cooperation is immediately high in the first game of the large continuation set. This asymmetry suggests a bias in favor of cooperation. We also examine the link between altruism and RPD play. We find that small continuation probability RPD play is correlated with giving in Dictator Games (DGs) played before and after the RPDs, whereas high continuation probability RPD play is not. Finally, we find less giving in the post-RPD DG than the pre-RPD DG, regardless of continuation probability order.
Highlights
Cooperation is central to successful human interaction, and research demonstrates that a key mechanism for promoting cooperation is repetition: when people interact repeatedly, the “shadow of the future” can make cooperation pay off in the long run [1]
Peysakhovich and Rand [9] found that participants who played a series of repeated Prisoner’s Dilemma (RPD) where “Grim” strongly risk-dominated “Always Defect” gave more in a subsequent Dictator Game (DG) compared to participants who played a series of RPDs where “Grim” was not an equilibrium
We examine the correlation between RPD cooperation and giving in DGs played before and after the RPD, seeking to replicate and extend the findings of Dreber et al [13], who argue that social preferences only help to explain RPD play in the absence of cooperative equilibria
Summary
Cooperation is central to successful human interaction, and research demonstrates that a key mechanism for promoting cooperation is repetition: when people interact repeatedly, the “shadow of the future” can make cooperation pay off in the long run [1]. Peysakhovich and Rand [9] found that participants who played a series of RPDs where “Grim” strongly risk-dominated “Always Defect” gave more in a subsequent Dictator Game (DG) compared to participants who played a series of RPDs where “Grim” was not an equilibrium They explain this observation using the “social heuristics hypothesis” [10,11], which argues that people internalize rules of thumb for social interactions that prescribe behaviors that are typically payoff-maximizing. By this logic, RPD environments that incentivize cooperation lead participants to develop “habits of prosociality”, which spill over to promote giving in the subsequent DG (and the opposite for RPD environments which incentivize defection). In both of these examples, behavior developed in a more socially- and strategically-complex game spills over to a subsequent simple one-shot anonymous allocation decision
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