The role of payoff parameters for cooperation in the one-shot Prisoner's Dilemma

Gächter, Simon; Lee, Kyeongtae; Sefton, Martin; Weber, Till O.

Abstract

The Prisoner's Dilemma is arguably the most important model of social dilemmas, but our knowledge about how its material payoff structure affects cooperation is incomplete. We investigate the effect of variation in material payoffs on cooperation in one-shot Prisoner's Dilemma games. We report results from three experiments (N = 1,993): in a preliminary experiment, we vary the payoffs over a large range. In our first main experiment (Study 1), we present a novel design that varies payoffs orthogonally in a within-subjects design. Our second main experiment, Study 2, investigates the orthogonal variation of payoffs in a between-subjects design. In a complementary analysis we also study the closely related payoff indices of normalized loss and gain, and the K-index. A robust finding of our experiments is that cooperation increases with the gains of mutual cooperation over mutual defection.

Citation

Gächter, S., Lee, K., Sefton, M., & Weber, T. O. (2024). The role of payoff parameters for cooperation in the one-shot Prisoner's Dilemma. European Economic Review, 166, Article 104753. https://doi.org/10.1016/j.euroecorev.2024.104753

• Journal Article Type: Article
• Acceptance Date: May 8, 2024
• Online Publication Date: May 9, 2024
• Publication Date: Jul 1, 2024
• Deposit Date: May 17, 2024
• Publicly Available Date: May 20, 2024
• Journal: European Economic Review
• Print ISSN: 0014-2921
• Electronic ISSN: 1873-572X
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 166
• Article Number: 104753
• DOI: https://doi.org/10.1016/j.euroecorev.2024.104753
• Keywords: Prisoner's Dilemma; Cooperation; Payoff parameters; Temptation; Risk; Efficiency; Normalized gain; Normalized loss; K-index; Experiments
• Public URL: https://nottingham-repository.worktribe.com/output/34871753
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0014292124000825?via%3Dihub