Judgement and Behaviour in the Prisoner's Dilemma: The Impact of Moral and Strategic Considerations

Abstract

How do people perceive a social dilemma such as the Prisoner’s Dilemma if the problem is framed focusing entirely on monetary incentives – as commonly done in laboratory experiments? Focusing on the involved conflict between strategic and moral incentives, we designed a two-stage experiment to analyse both the subjects’ judgement (Part 1) and their behaviour (Part 2) in such a setting. In Part 1, we elicited the subjects’ preferences over the different outcomes in the Prisoner’s Dilemma from three different perspectives (moral, strategic, overall). In Part 2, conducted some months later, we let them decide on actions in the respective context. The data show that: (a) subjects can differentiate between moral and strategic incentives; (b) overall preferences are often a combination of moral and strategic preferences; (c) the subjects’ expressed preferences over outcomes are closely aligned with specific personal values; (d) actual behaviour in the lab is primarily determined by the subjects’ (pessimistic) first order beliefs. Moreover, the analysis suggests that while subjects have a more complex and, indeed, socially minded view on the incentive structure of the Prisoner’s Dilemma, the common focus on monetary incentives and anonymity in economic lab experiments directs judgements and behaviour into a special and not necessarily realistic direction.