Social preferences and the variability of conditional cooperation

Baader, Malte; Gächter, Simon; Lee, Kyeongtae; Sefton, Martin

Abstract

We experimentally examine how incentives affect conditional cooperation (i.e., cooperating in response to cooperation and defecting in response to defection) in social dilemmas. In our first study, subjects play eight Sequential Prisoner's Dilemma games with varying payoffs. We elicit second mover strategies and find that most second movers conditionally cooperate in some games and free ride in others. The rate of conditional cooperation is higher when the own gain from defecting is lower and when the loss imposed on the first mover by defecting is higher. This pattern is consistent with both social preference models and stochastic choice models. In a second study subjects play 64 social dilemma games, and we jointly estimate noise and social preference parameters at the individual level. Most of our subjects place significantly positive weight on others' payoffs, supporting the underlying role of social preferences in conditional cooperation. Our results suggest that conditional cooperation is not a fixed trait but rather a symptom of the interaction between game incentives and underlying social preferences.

Citation

Baader, M., Gächter, S., Lee, K., & Sefton, M. (2024). Social preferences and the variability of conditional cooperation. Economic Theory, https://doi.org/10.1007/s00199-024-01617-1

• Journal Article Type: Article
• Acceptance Date: Oct 12, 2024
• Online Publication Date: Nov 11, 2024
• Publication Date: Nov 11, 2024
• Deposit Date: Oct 23, 2024
• Publicly Available Date: Nov 12, 2025
• Journal: Economic Theory
• Print ISSN: 0938-2259
• Electronic ISSN: 1432-0479
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1007/s00199-024-01617-1
• Keywords: sequential prisoner's dilemma; conditional cooperation; social preferences JEL codes: A13; C91
• Public URL: https://nottingham-repository.worktribe.com/output/40862328
• Publisher URL: https://link.springer.com/article/10.1007/s00199-024-01617-1