Selfish Subjects Research Articles

Conveniently pessimistic: manipulating beliefs to excuse selfishness in charitable giving

This paper demonstrates how people can manipulate their beliefs in order to obtain the self-image of an altruistic person. I present an online experiment in which subjects need to decide whether to behave altruistically or selfishly in an ambiguous environment. Due to the nature of ambiguity in this environment, those who are pessimistic have a legitimate reason to behave selfishly. Thus, subjects who are selfish but like to think of themselves as altruistic have an incentive to overstate their pessimism. In the experiment, I ask subjects how optimistic or pessimistic they feel about an ambiguous probability and then, through a separate task, I elicit their true beliefs about the same probability. I find that selfish subjects claim to be systematically more pessimistic than they truly are whereas altruistic subjects report their pessimism (or optimism) truthfully. Given the experiment design, the only plausible explanation for this discrepancy is that selfish subjects deliberately overstate their pessimism in order to maintain the self-image of an altruistic person. Altruistic subjects, whose behavior has already proven their altruism, have no such need for belief manipulation.JEL ClassificationsC91, D82, D83, D84.

Inequity aversion in dynamically complex supply chains

Inequity aversion models developed by Fehr and Schmidt (1999) and Bolton and Ockenfels (2000) assume that, in addition to purely selfish subjects, there are subjects who dislike inequitable outcomes. Within the supply chain management literature, these models were used to study fairness concerns. A common limitation in this research area has been the use of rather simple settings, mainly dyadic channels with a single supplier and retailer. Thus, researching social preferences in different channel structures and the idea of multiple-player groups have been suggested as interesting future research areas. In this paper, we present dynamic analyses of the two inequity aversion models and their application in the Beer Distribution Game setting. Our simulation results challenge currently held assumptions about fairness perceptions among supply chain members. We provide some structural explanations for this and suggests future research areas.

Self-Deception: Adopting False Beliefs for a Favorable Self-View

This paper demonstrates how people deceive themselves into thinking of themselves as altruistic. I present a lab experiment in which subjects need to decide whether to behave altruistically or selfishly in an ambiguous environment. Due to the nature of ambiguity in this environment, those who are pessimistic have a legitimate reason to behave selfishly, even if they are inherently altruistic. For people who are inherently selfish but like to think of themselves as altruistic, this environment can serve as a scapegoat for selfish behavior. That is, by falsely claiming to be pessimistic, individuals can behave selfishly without damaging their self-image of being altruistic. Through two seemingly unrelated experimental tasks, I elicit subjects’ adopted beliefs and true beliefs about the same probability. I find that selfish subjects adopt beliefs that are systematically more pessimistic beliefs than their true beliefs, whereas altruistic subjects adopt beliefs that are in alignment with their true beliefs. The most plausible explanation for why only selfish subjects manipulate their beliefs is that selfish behavior damages their self-image and belief manipulation helps them mitigate that damage; altruistic subjects, by contrast, have no such need for belief manipulation because their behavior does not damage their self-image.

Social preferences and political attitudes: An online experiment on a large heterogeneous sample

This paper investigates in a large and heterogeneous sample the relationship between social preferences and political attitudes. Social preferences relate to political attitudes in a particular way: Selfish subjects are the extremists on the one side of the political spectrum – they are more likely to vote for a right-wing party, less inclined to favor redistribution, less likely to hold favorable views towards immigration and more likely to consider themselves right-wing than all other types. Inequality-averse, altruistic and maximin subjects, all characterized by benevolence in the domain of advantageous inequality, sit at the opposite end of the spectrum. Overall, our evidence indicates that political outcomes in various domains such as taxation, social security, the pension system or immigration cannot be fully understood without taking distributional preferences into account.

Preferences-dependent learning in the centipede game: The persistence of mistrust

A candidate explanation for the persistence of heterogeneous behavior in a sequential social dilemma played many times is the existence of heterogeneous preferences. Preferences-dependent conjectures about opponents’ behavior are an additional source of heterogeneity. By behaving differently, different preference types acquire different information. Thus, when observing only outcomes of own past interactions heterogeneous and possibly wrong conjectures about opponents’ strategies may endogenously arise and persist. In a Centipede game experiment played for forty rounds, we manipulate the type of ex post information and the method of play. We find that, when the game is played in its reduced normal form and subjects have only access to personal statistics, heterogeneity of behavior across preference types persists in the long run. In this case, behavior resembles a self-confirming equilibrium: selfish subjects take at earlier nodes due to an unjustified lack of trust. When subjects have also access to public statistics, heterogeneity disappears: selfish subjects tend to pass more often and play moves towards Bayes Nash equilibrium.

Computing Social Value Conversion in the Human Brain.

Social signals play powerful roles in shaping self-oriented reward valuation and decision making. These signals activate social and valuation/decision areas, but the core computation for their integration into the self-oriented decision machinery remains unclear. Here, we study how a fundamental social signal, social value (others' reward value), is converted into self-oriented decision making in the human brain. Using behavioral analysis, modeling, and neuroimaging, we show three-stage processing of social value conversion from the offer to the effective value and then to the final decision value. First, a value of others' bonus on offer, called offered value, was encoded uniquely in the right temporoparietal junction (rTPJ) and also in the left dorsolateral prefrontal cortex (ldlPFC), which is commonly activated by offered self-bonus value. The effective value, an intermediate value representing the effective influence of the offer on the decision, was represented in the right anterior insula (rAI), and the final decision value was encoded in the medial prefrontal cortex (mPFC). Second, using psychophysiological interaction and dynamic causal modeling analyses, we demonstrated three-stage feedforward processing from the rTPJ and ldPFC to the rAI and then from rAI to the mPFC. Further, we showed that these characteristics of social conversion underlie distinct sociobehavioral phenotypes. We demonstrate that the variability in the conversion underlies the difference between prosocial and selfish subjects, as seen from the differential strength of the rAI and ldlPFC coupling to the mPFC responses, respectively. Together, these findings identified fundamental neural computation processes for social value conversion underlying complex social decision making behaviors.SIGNIFICANCE STATEMENT In daily life, we make decisions based on self-interest, but also in consideration for others' status. These social influences modulate valuation and decision signals in the brain, suggesting a fundamental process called value conversion that translates social information into self-referenced decisions. However, little is known about the conversion process and its underlying brain mechanisms. We investigated value conversion using human fMRI with computational modeling and found three essential stages in a progressive brain circuit from social to empathic and decision areas. Interestingly, the brain mechanism of conversion differed between prosocial and individualistic subjects. These findings reveal how the brain processes and merges social information into the elemental flow of self-interested decision making.

Biased sequential sampling underlies the effects of time pressure and delay in social decision making

Social decision making involves balancing conflicts between selfishness and pro-sociality. The cognitive processes underlying such decisions are not well understood, with some arguing for a single comparison process, while others argue for dual processes (one intuitive and one deliberative). Here, we propose a way to reconcile these two opposing frameworks. We argue that behavior attributed to intuition can instead be seen as a starting point bias of a sequential sampling model (SSM) process, analogous to a prior in a Bayesian framework. Using mini-dictator games in which subjects make binary decisions about how to allocate money between themselves and another participant, we find that pro-social subjects become more pro-social under time pressure and less pro-social under time delay, while selfish subjects do the opposite. Our findings help reconcile the conflicting results concerning the cognitive processes of social decision making and highlight the importance of modeling the dynamics of the choice process.

Making good cider out of bad apples — Signaling expectations boosts cooperation among would-be free riders

AbstractThe present study investigates how group-cooperation heuristics boost voluntary contributions in a repeated public goods game. We manipulate two separate factors in a two-person public goods game: i) group composition (Selfish Subjects vs. Conditional Cooperators) and ii) common knowledge about group composition (Information vs. No Information). In addition, we let the subjects signal expectations of the other’s contributions in the experiment’s second phase. Common knowledge of Selfish type alone slightly dampens contributions but dramatically increases contributions when signaling of expectations is allowed. The results suggest that group-cooperation heuristics are triggered when two factors are jointly salient to the agent: (i) that there is no one to free-ride on; and (ii) that the other wants to cooperate because of (i). We highlight the potential effectiveness of group-cooperation heuristics and proposesolution thinkingas the schema of reasoning underlying the heuristics. The high correlation between expectations and actual contributions is compatible with the existence of default preference to satisfy others’ expectations (or to avoid disappointing them), but the stark end-game effect suggests that group-cooperation heuristics, at least among selfish players, function ultimately to benefit material self-interest rather than to just please others.

The dynamics of behavior in modified dictator games.

We investigate the dynamics of individual pro-social behavior over time. The dynamics are tested by running the same experiment with the same subjects at several points in time. To exclude learning and reputation building, we employ non-strategic decision tasks and a sequential prisoners-dilemma as a control treatment. In the first wave, pro-social concerns explain a high share of individual decisions. Pro-social decisions decrease over time, however. In the final wave, most decisions can be accounted for by assuming pure selfishness. Stable behavior in the sense that subjects stick to their decisions over time is observed predominantly for purely selfish subjects. We offer two explanation for our results: diminishing experimenter demand effects and moral self-licensing.

Logical abilities and behavior in strategic-form games

This paper investigates the impact of cognitive abilities and preferences on behavior in games. We first measure subjects’ logical abilities and social preferences and then evaluate their influence on behavior in strategic-form games. For this purpose, we estimate how logical abilities and preferences relate to the probability of a subject being of a specific behavioral type. We find that better logical abilities increase the likelihood of sophisticated behavior. This shift is stronger for subjects who are classified as “selfish”. However, not even the most logically able, selfish subjects are identified as Nash types.

To Trust or Not to Trust That is Not the Question

We propose that there are three determinants of sender behavior in trust games: Beliefs re-garding the amounts returned, risk aversion, and reciprocity. Particularly, we are interested in the role of reciprocity because the possibility of negative expected reciprocal utility may lead to betrayal-averse sender behavior, i.e. to a situation where reciprocal subjects send less money than solely selfish ones. In our experiment, most subjects show distinct social preferences in the receiver role, but in the sender role they do not distinguish between a standard trust game with a human partner and a non-social, lottery-like setting, where a computer plays the role of the receiver. This means that the relevance of reciprocity considerations under uncertainty might be fundamentally different from those when no uncertainty is present. Furthermore, we find that sendings are mainly driven by overoptimistic beliefs. We use a modified version of the reciprocity model of Dufwenberg and Kirchsteiger [Games Econ. Beh. 47 (2004) 268] to explain our results and thereby show why reciprocal and selfish subjects almost do not differ in their sending behavior if one controls for beliefs and risk aversion. For other experimental settings, our model does predict differing behavior, which is in line with findings reported in the literature.

Heterogeneous reactions to heterogeneity in returns from public goods

In many cases individuals benefit differently from the provision of a public good. We study in a laboratory experiment how heterogeneity in returns and uncertainty about the own return affects unconditional and conditional contribution behavior in a linear public goods game. The elicitation of conditional contributions in combination with a within subject design allows us to investigate belief-independent and type-specific reactions to heterogeneity. We find that, on average, heterogeneity in returns decreases unconditional contributions but affects contributions only weakly. Uncertainty in addition to heterogeneity reduces conditional contributions slightly. Individual reactions to heterogeneity differ systematically. Selfish subjects and one third of conditional cooperators do not react to heterogeneity whereas the reactions of the remaining conditional cooperators vary. A substantial part of heterogeneity in reactions can be explained by inequity aversion with respect to different reference groups.

The agencies method for coalition formation in experimental games

In society, power is often transferred to another person or group. A previous work studied the evolution of cooperation among robot players through a coalition formation game with a non-cooperative procedure of acceptance of an agency of another player. Motivated by this previous work, we conduct a laboratory experiment on finitely repeated three-person coalition formation games. Human players with different strength according to the coalition payoffs can accept a transfer of power to another player, the agent, who then distributes the coalition payoffs. We find that the agencies method for coalition formation is quite successful in promoting efficiency. However, the agent faces a tension between short-term incentives of not equally distributing the coalition payoff and the long-term concern to keep cooperation going. In a given round, the strong player in our experiment often resolves this tension approximately in line with the Shapley value and the nucleolus. Yet aggregated over all rounds, the payoff differences between players are rather small, and the equal division of payoffs predicts about 80% of all groups best. One reason is that the voting procedure appears to induce a balance of power, independent of the individual player's strength: Selfish subjects tend to be voted out of their agency and are further disciplined by reciprocal behaviors.

The endogenous nature of the measurement of social preferences

We present evidence against the standard assumptions that social preferences are stable and can be measured in a reliable, nonintrusive manner. We find evidence that measures of social preferences can affect subsequent behavior. Researchers often measure social preferences by posing dictator type allocation decisions. The social value orientation (SVO) is a particular sequence of dictator decisions. We vary the order in which the SVO and a larger stakes dictator game are presented. We also vary the form of the dictator game. In one study, we employ the standard dictator game, and in the other, we employ a nonstandard dictator game. With the standard dictator game, we find that prosocial subjects act even more prosocially when the SVO is administered first, whereas selfish subjects are unaffected by the order. With the nonstandard dictator game, we find evidence across all subjects that those who first receive the SVO are more generous in the dictator game but we do not find the effect among only the generous subjects. Across both dictator game forms, we find evidence that the subjects who are first given the SVO were more generous than subjects who are given the SVO last. We also find that this effect is stronger among the subjects with a perfectly consistent SVO measure. Although we cannot determine whether the order affects preferences or the measure of preferences, our results are incompatible with the assumptions that social preferences are stable and can be measured in a reliable, nonintrusive manner.

The Endogenous Nature of the Measurement of Social Preferences

We present evidence against the standard assumptions that social preferences are stable and can be measured in a reliable, nonintrusive manner. We find evidence that measures of social preferences can affect subsequent behavior. Researchers often measure social preferences by posing dictator type allocation decisions. The Social Value Orientation (SVO) is a particular sequence of dictator decisions. We vary the order in which the SVO and a larger stakes dictator game are presented. We also vary the form of the dictator game. In one study, we employ the standard dictator game, and in the other, we employ a nonstandard dictator game. With the standard dictator game, we find that prosocial subjects act even more prosocially when the SVO is administered first, whereas selfish subjects are unaffected by the order. With the nonstandard dictator game, we find evidence across all subjects that those who first receive the SVO are more generous in the dictator game but we do not find the effect among only the generous subjects. Across both dictator game forms, we find evidence that the subjects who are first given the SVO were more generous than subjects who are given the SVO last. We also find that this effect is stronger among the subjects with a perfectly consistent SVO measure. Although we cannot determine whether the order affects preferences or the measure of preferences, our results are incompatible with the assumptions that social preferences are stable and can be measured in a reliable, nonintrusive manner.

Logical Abilities and Behavior in Strategic-Form Games

This paper investigates the impact of individual characteristics on behavior in strategic-form. We first measure subjects' logical abilities and social preferences and then evaluate their influence on behavior in strategic-form games. For this purpose, we estimate how logical abilities and preferences relate to the probability of a subject being of a specific behavioral type. We find that better logical abilities increase the likelihood of sophisticated behavior. This shift is stronger for subjects who are classified as selfish''. However, not even the most logically able, selfish subjects are identified as Nash types. These results have important implications for mechanism design theory.

An Experimental Test of the Deterrence Hypothesis

Crime has to be punished, but does punishment reduce crime? We conduct a neutrally framed laboratory experiment to test the deterrence hypothesis, namely that crime is weakly decreasing in deterrent incentives, i.e. severity and probability of punishment. In our experiment, subjects can steal from another participant's payoff. Deterrent incentives vary across and within sessions. The across subject analysis clearly rejects the deterrence hypothesis: except for very high levels of incentives, subjects steal more the stronger the incentives. We observe two types of subjects: selfish subjects who act according to the deterrence hypothesis and fair-minded subjects for whom deterrent incentives backfire.

Do the Selfish Mimic Cooperators? Experimental Evidence from Finitely-Repeated Labor Markets

Experimental studies have consistently shown that cooperative outcomes can emerge even in finitely repeated games. Such outcomes are justified by existing reputation building models, which suggest that cooperative outcomes can be sustained if some subjects have other-regarding preferences. While the existence of other-regarding preferences is typically used to justify experimental outcomes, we are unaware of empirical studies that explicitly examine the interaction between cooperators (those with other-regarding preferences) and selfish subjects in sustaining cooperation. In this paper, we classify subjects as either selfish or cooperative using simple social preference games and then test for behavioral differences between the two types in a finitely-repeated labor market with unenforceable worker effort. Theory predicts, and our data confirms, that (1) selfish players mimic the actions of cooperators when trading partners can track the individual reputation of past partners and (2) selfish and cooperative types act differently when individual reputations cannot be tracked.

Do the Selfish Mimic Cooperators? Experimental Evidence from Finitely-Repeated Labor Markets

Experimental studies have consistently shown that cooperative outcomes can emerge even in finitely repeated games. Such outcomes are justified by existing reputation building models, which suggest that cooperative outcomes can be sustained if some subjects have other-regarding preferences. While the existence of other-regarding preferences is typically used to justify experimental outcomes, we are unaware of empirical studies that explicitly examine the interaction between cooperators (those with other-regarding preferences) and selfish subjects in sustaining cooperation. In this paper, we classify subjects as either selfish or cooperative using simple social preference games and then test for behavioral differences between the two types in a finitely-repeated labor market with unenforceable worker effort. Theory predicts, and our data confirms, that (1) selfish players mimic the actions of cooperators when trading partners can track the individual reputation of past partners and (2) selfish and cooperative types act differently when individual reputations cannot be tracked.

Biases for acquiring information individually rather than socially

We discuss theoretical and empirical arguments for a human bias to acquire information individually rather than socially. In particular, we argue that when other people can be observed, information collection is a public good and hence some of the individual variation in the choice between individual and social learning can be explained by variation in social value orientation. We conducted two experimental studies, based on the game Explore & Collect, to test the predictions that (1) socially and individually acquired information of equal objective value are treated differently, and (2) prosocial subjects tend to spend more effort than selfish subjects on individual acquiring of information. Both predictions were supported.