Carrots without Bite: On the Ineffectiveness of 'Rewards' in sustaining Cooperation in Social Dilemmas

Peer-to-peer sanctions increase cooperation in multi-person social dilemmas (Fehr & Gachter (2000)), but not when subjects have the option to retaliate (Nikiforakis (2008)). One-shot peer-to-peer rewards have been found to enhance efficiency too (Vyrastekova & van Soest (2008), Rand et al. (2009a)), but it is an open question whether the positive impact on cooperation is weakened or strengthened when we allow for counterrewarding. We examine the impact of possible reciprocity in rewarding on cooperation in a non-linear public bad game, and find that efficiency in the social dilemma is equally low as absent any reward options. We hypothesize that subjects are unwilling to sever mutually profitable bilateral exchanges of reward tokens to induce cooperation in the social dilemma, and identify the underlying mechanism by comparing behavior across three matching protocols

Carrots without Bite: On the Ineffectiveness of 'Rewards' in sustaining Cooperation in Social Dilemmas

Peer-to-peer sanctions increase cooperation in multi-person social dilemmas (Fehr & Gachter (2000)), but not when subjects have the option to retaliate (Nikiforakis (2008)). One-shot peer-to-peer rewards have been found to enhance efficiency too (Vyrastekova & van Soest (2008), Rand et al. (2009a)), but it is an open question whether the positive impact on cooperation is weakened or strengthened when we allow for counterrewarding. We examine the impact of possible reciprocity in rewarding on cooperation in a non-linear public bad game, and find that efficiency in the social dilemma is equally low as absent any reward options. We hypothesize that subjects are unwilling to sever mutually profitable bilateral exchanges of reward tokens to induce cooperation in the social dilemma, and identify the underlying mechanism by comparing behavior across three matching protocols

Gender Beliefs and Cooperation in a Public Goods game Experiment

We study the role of gender beliefs for cooperation in a public goods game experiment. Controlling for risk preferences and for subjects’ unconditional willingness to cooperate, we find that gender beliefs affect behavior in homogenous groups where the group composition was announced

Social risk and ambiguity in the trust game

Despite intensive research there is no clear evidence for a link between lottery risk preferences and risk involved in trusting others. We argue that this is partially due to a misalignment of the underlying sources of risk. Trusting is giving up control to a human source of risk while lottery risk has a mechanistic source. We propose a risky trust game that experimentally elicits social risk preferences that pertain to the same underlying human source. Our results show that transfers in the classic trust game are indeed best explained by social risk preferences and not by lottery risk preferences with an underlying mechanistic source. In addition, we argue that the type of uncertainty also plays a role. In the absence of objectively known probabilities of trustworthiness, trust also has an ambiguous component. We therefore decompose uncertainty in the trust game into social risk and an ambiguous component. Our results provide evidence that, when accounting for social risk, subjects who score high on ambiguity tolerance explain some of the remainder of trusting behavior

Trust and risk revisited

A trustor faces a risky choice in the trust game when he acts upon his belief regarding the chances of betrayal by the trustee. Despite intensive research there is no clear evidence for a link between lottery risk preferences and risk involved in trusting others. We argue that this is due to crucial differences between the risk measurements in the two settings. Trusting is giving up control to a human while lottery risk arises from a mechanistic randomization device. We propose a risky trust game that experimentally measures risk in the same context as the standard trust game, but nevertheless reduces the trust decision to objective risk. Our results show that transfers in the trust game can indeed be explained by individual risk attitudes elicited with the risky trust game, while lottery risk preferences have no explanatory power

Social risk and ambiguity in the trust game

Despite intensive research there is no clear evidence for a link between lottery risk preferences and risk involved in trusting others. We argue that this is partially due to a misalignment of the underlying sources of risk. Trusting is giving up control to a human source of risk while lottery risk has a mechanistic source. We propose a risky trust game that experimentally elicits social risk preferences that pertain to the same underlying human source. Our results show that transfers in the classic trust game are indeed best explained by social risk preferences and not by lottery risk preferences with an underlying mechanistic source. In addition, we argue that the type of uncertainty also plays a role. In the absence of objectively known probabilities of trustworthiness, trust also has an ambiguous component. We therefore decompose uncertainty in the trust game into social risk and an ambiguous component. Our results provide evidence that, when accounting for social risk, subjects who score high on ambiguity tolerance explain some of the remainder of trusting behavior

EFFICIENCY VERSUS RISK DOMINANCE IN AN EVOLUTIONARY MODEL WITH CHEAP TALK

Vyrastekova, J.