Disposition, History and Contributions in Public Goods Experiments

Private incentives to invest in a public good are modeled as self- interested reciprocity where individuals use reputational scoring rules to determine their optimal level of investment. The model predicts that the disposition of any subject to cooperate is revealed by their first period investment in a voluntary contribution experiment, and that grouping cooperative subjects together will improve, and in some circumstances sustain, their private investment in the public good. Actual investment behavior is then studied with laboratory experiments that compare the contributions of subjects randomly reassigned into groups to contributions under a mechanism that sorts subjects into groups based on their individual investment decisions. The sorting mechanism helps to keep subjects with cooperative dispositions together and leads to statistically significant increases, relative to the random matching condition, in cooperators’ investments in the public good.public goods, experiments, cooperation, type classification, individual differences

on the efficiency of team-based meritocracies

According to theory a pure meritocracy is efficient because individual members are competitively rewarded according to their individual contributions to society. However, purely individually based meritocracies seldom occur. We introduce a new model of social production called “team-based meritocracy” (TBM) in which individual members are rewarded based on their team membership. We demonstrate that as long as such team membership is both mobile and competitively based on contributions, individuals are able to tacitly coordinate a complex and counterintuitive asymmetric equilibrium that is close to Pareto-optimal, possibly indicating that such a group-based meritocracy could be a social structure to which humans respond with particular ease. Our findings are relevant to many contemporary societies in which rewards are at least in part determined via membership in organizations such as for example firms, and organizational membership is increasingly determined by contribution rather than privilege.social stratification, meritocracies, mechanism design, non-cooperative games, experiment, team production

The meritocracy as a mechanism to overcome social dilemmas

A new mechanism that substantially mitigates social dilemmas is examined theoretically and experimentally. It resembles the voluntary contribution mechanism (VCM) except that in each decision round subjects are ranked and then grouped according to their public contribution. The game has multiple mostly asymmetric, Pareto-ranked pure-strategy equilibria which are rather counterintuitive, yet experimental subjects tacitly coordinate the payoff-dominant equilibrium reliably and quite precisely. In the VCM grouping is random which, with its arbitrary relation to contribution corresponds to any grouping unrelated to output, for example grouping based on race or gender. The new mechanism resembles a meritocracy since based on how much they contribute; participants are assigned to strata that vary in payoff. The findings shed light on the nature of merit-based social and organizational grouping and provide guidelines for future research and application

The meritocracy as a mechanism to overcome social dilemmas

A new mechanism that substantially mitigates social dilemmas is examined theoretically and experimentally. It resembles the voluntary contribution mechanism (VCM) except that in each decision round subjects are ranked and then grouped according to their public contribution. The game has multiple mostly asymmetric, Pareto-ranked pure-strategy equilibria which are rather counterintuitive, yet experimental subjects tacitly coordinate the payoff-dominant equilibrium reliably and quite precisely. In the VCM grouping is random which, with its arbitrary relation to contribution corresponds to any grouping unrelated to output, for example grouping based on race or gender. The new mechanism resembles a meritocracy since based on how much they contribute; participants are assigned to strata that vary in payoff. The findings shed light on the nature of merit-based social and organizational grouping and provide guidelines for future research and application

on the efficiency of team-based meritocracies

According to theory a pure meritocracy is efficient because individual members are competitively rewarded according to their individual contributions to society. However, purely individually based meritocracies seldom occur. We introduce a new model of social production called “team-based meritocracy” (TBM) in which individual members are rewarded based on their team membership. We demonstrate that as long as such team membership is both mobile and competitively based on contributions, individuals are able to tacitly coordinate a complex and counterintuitive asymmetric equilibrium that is close to Pareto-optimal, possibly indicating that such a group-based meritocracy could be a social structure to which humans respond with particular ease. Our findings are relevant to many contemporary societies in which rewards are at least in part determined via membership in organizations such as for example firms, and organizational membership is increasingly determined by contribution rather than privilege

Determinants of cooperation and competition in single-level and multi-level interactive decision-making

The common focus of the three studies in this dissertation is the tension between cooperative, efficiency-enhancing behaviors and the narrowly self-interested equilibrium behavior predicted by standard game theory. In recent years, the tenets of the latter have been challenged by empirical findings that indicate that humans are more cooperative than traditional normative theory predicts. Basic concepts and predictions of game theory and past research on cooperative tendencies are reviewed. The first experimental study here involves a two-person one-shot extensive-form trust game. The major finding is that the Mach-IV personality test can help screen reciprocators from non-reciprocators. In the second study, subjects in a standard voluntary Contribution Mechanism (VCM) are rematched at each trial. If rematched at random, contributions decline over rounds as in many other VCM experiments. If, however, subjects, without their knowledge, are rearranged into groups according to the amount of their contribution, contribution rates remain higher because cooperators do not get discouraged by free riders. This finding is accounted for by the goodwill accounting framework of McCabe and Smith (1999). In the third experimental study, a standard VCM is embedded in intergroup conflict as groups compete for a fixed prize that is divided among the members of the winning group, either equally or proportionally to individual members' contributions. A group's wining probability depends on how its public good contributions compare to the contributions of the competing group. Given specific parameterization, non-contribution in such a two-level interaction is no longer the dominant strategy, even though it would be in the corresponding one-level ACM. Further, equilibrium contributions are higher under proportional than under equal prize division. On the aggregate level, the data support equilibrium predictions, even though there is some evidence of over-contribution under group competition and individual contribution patterns are very idiosyncratic. A simple reinforcement learning model (See Roth and Erev, 1995) accounts well for the change in aggregate data over trials. The implications of all three studies are that cooperativeness can be enhanced by the means of screening, social structure and incentive schemes