D83 Search; Learning; Information and Knowledge; Communication; Belief
Refine
Has Fulltext
- yes (6)
Document Type
- Working Paper (6)
Language
- English (6)
Is part of the Bibliography
- yes (6)
Keywords
- experiment (5)
- communication (3)
- cooperation (2)
- beliefs (1)
- deliberate ignorance (1)
- dictator game (1)
- emotion regulation (1)
- envy (1)
- inequality (1)
- infinitely repeated game (1)
Institute
- Center for Economic Policy Analysis (CEPA) (6) (remove)
The present paper proposes a novel approach for equilibrium selection in the infinitely repeated prisoner’s dilemma where players can communicate before choosing their strategies. This approach yields a critical discount factor that makes different predictions for cooperation than the usually considered sub-game perfect or risk dominance critical discount factors. In laboratory experiments, we find that our factor is useful for predicting cooperation. For payoff changes where the usually considered factors and our factor make different predictions, the observed cooperation is consistent with the predictions based on our factor.
In this paper, we study one channel through which communication may facilitate cooperative behavior – belief precision. In a prisoner’s dilemma experiment, we show that communication not only makes individuals more optimistic that their partner will cooperate but also increases the precision of this belief, thereby reducing strategic uncertainty. To disentangle the shift in mean beliefs from the increase in precision, we elicit beliefs and precision in a two-stage procedure and in three situations: without communication, before communication, and after communication. We find that the precision of beliefs increases during communication.
Leadership plays an important role for the efficient and fair solution of social dilemmas but the effectiveness of a leader can vary substantially. Two main factors of leadership impact are the ability to induce high contributions by all group members and the (expected) fair use of power. Participants in our experiment decide about contributions to a public good. After all contributions are made, the leader can choose how much of the joint earnings to assign to herself; the remainder is distributed equally among the followers. Using machine learning techniques, we study whether the content of initial open statements by the group members predicts their behavior as a leader and whether groups are able to identify such clues and endogenously appoint a “good” leader to solve the dilemma. We find that leaders who promise fairness are more likely to behave fairly, and that followers appoint as leaders those who write more explicitly about fairness and efficiency. However, in their contribution decision, followers focus on the leader’s first-move contribution and place less importance on the content of the leader’s statements.
Envy is an unpleasant emotion. If individuals anticipate that comparing their payoff with the (potentially higher) payoff of others will make them envious, they may want to actively avoid information about other people’s payoffs. Given the opportunity to reduce another person’s payoff, an individual’s envy may trigger behavior that is detrimental to welfare. In this case, if individuals anticipate that they will react in a welfare-reducing way, they may also avoid information about other people’s payoffs from the outset. We investigated these two hypotheses using three experiments. We found that 13% of our potentially envious subjects avoided information when they did not have the opportunity to reduce another participant’s payoff. Psychological scales do not explain this behavior. We also found that voluntarily uninformed subjects did neither deduct less of the payoff nor less frequently than subjects who could not avoid the information.
Being ignorant of key aspects of a strategic interaction can represent an advantage rather than a handicap. We study one particular context in which ignorance can be beneficial: iterated strategic interactions in which voluntary cooperation may be sustained into the final round if players voluntarily forego knowledge about the time horizon. We experimentally examine this option to remain ignorant about the time horizon in a finitely repeated two-person prisoners’ dilemma game. We confirm that pairs without horizon knowledge avoid the drop in cooperation that otherwise occurs toward the end of the game. However, this effect is superposed by cooperation declining more rapidly in pairs without horizon knowledge during the middle phase of the game, especially if players do not know that the other player also wanted to remain ignorant of the time horizon.
Getting a Yes
(2019)
This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game, in which the recipient can send a free-form text message to the dictator before the latter decides. We find that putting effort into the message, writing in a humorous way and mentioning reasons why the money is needed pays off. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the dictator’s power and responsibility.