Explaining Cooperative Behavior in Public Goods Games: How Preferences and Beliefs Affect Contribution Levels

Kurt Ackermann,Ryan Murphy

doi:10.3390/g10010015

Kurt Ackermann, Ryan Murphy

Open Access

https://doi.org/10.3390/g10010015

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Abstract

There is a large body of evidence showing that a substantial proportion of people cooperate in public goods games, even if the situation is one-shot and completely anonymous. In the present study, we bring together two major endogenous factors that are known to affect cooperation levels, and in so doing replicate and extend previous empirical research on public goods problems in several important ways. We measure social preferences and concurrently elicit beliefs on the individual level using multiple methods, and at multiple times during the experiment. With this rich set of predictor variables at the individual level, we test how well individual contribution decisions can be accounted for in both a one-shot and a repeated interaction. We show that when heterogeneity in people’s preferences and beliefs is taken into consideration, more than 50% of the variance in individual choice behavior can be explained. Furthermore, we show that people do not only update their beliefs in a repeated public goods game, but also that their social preferences change, to some extent, in response to the choices of other decision makers.

Highlights

From the vantage of standard neoclassic economic theory, cooperation between humans can be difficult to explain
We show that taking into account both the decision makers’ preferences, and their beliefs about others, we can explain more than 50% of the variance in DMs’ contribution choices in both a one-shot and a repeated public goods game
Excessive and mixed conditional cooperators are predominantly DMs with high social value orientation (SVO) angles as expected. These results show that the tendency to condition own contributions on the contribution levels of others is only mildly associated with SVO, and that conditional cooperation is a behavioral pattern that is shown by DMs who are heterogeneous with respect to their basic distributive social preferences

Summary

Introduction

From the vantage of standard neoclassic economic theory, cooperation between humans can be difficult to explain. Decision makers (DMs) are conceptualized as narrowly self-interested cognitive agents who believe that other DMs are narrowly self-interested, and that these preferences are common knowledge. These normative axioms yield powerful, precise, and testable models of behavior in interactive decision contexts. In some cases, these axioms yield predictions that are remarkably accurate, whereas in other situations these models are woefully inadequate for comparative illustrations of both instances, see e.g., [1,2,3].

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