Fairness Norms Can Explain the Emergence of Specific Cooperation Norms in the Battle of the Prisoner's Dilemma

Abstract

Cooperation norms often emerge in situations, where the long term collective benefits help to overcome short run individual interests, for instance in repeated Prisoner's Dilemma (PD) situations. Often, however, there are different paths to cooperation, benefiting different kinds of actors to different degrees. This leads to payoff asymmetries even in the state of cooperation, and consequently can give rise to normative conflicts about which norms should be in place. This norm coordination problem will be modeled as a Battle of the Sexes game (BoS) with different degrees of asymmetry in payoffs. I combine the PD and the BoS to the 3 × 3 Battle of the Prisoner's Dilemma (BOPD) with several asymmetric cooperative and 1 noncooperative equilibria. Game theoretical and “behavioral” predictions are derived about the kind of norms that are likely to emerge under different shadows of the future and degrees of asymmetry and tested in a lab experiment. The experimental data show that game theory fairly well predicts the basic main effects of the experimental manipulations but “behavioral” predictions perform better in describing the equilibrium selection process of emerging norms.