Procedurally Rational Volunteers

Abstract

The mixed-strategy equilibrium applied to the volunteer's dilemma (Diekmann, 1985) predicts that the probability that at least 1 bystander volunteers decreases, if the number of bystander increases. I argue that this prediction lacks empirical support and demonstrate that an alternative solution concept from the literature on bounded rationality, the procedurally rational equilibrium (Osborne & Rubinstein, 1998), yields alternative predictions. I supply some empirical evidence that the alternative solution concept fares better in explaining observed behavior in the volunteer's dilemma.