When is the risk of cooperation worth taking? The prisoner’s dilemma as a game of multiple motives

ABSTRACT

This experimental article helps to understand the motives behind cooperation in the prisoner’s dilemma. It manipulates the pay-off in case both players defect in a two-player, one-shot prisoner’s dilemma and explains the degree of cooperation by a combination of four motives: efficiency, conditional cooperation, fear and greed. All motives are significant but some become only significant if one controls for all remaining ones. This seems to be the reason why earlier attempts at explaining choices in the prisoner’s dilemma with personality have not been successful.

KEYWORDS:

• Prisoner’s dilemma
• efficiency
• belief
• risk aversion
• loss aversion
• risky dictator game

JEL CLASSIFICATION:

• C72
• C91
• D03
• H41

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplemental data for this article can be accessed here.

Notes

¹ From pre-tests, we find that this is approximately the empirical mean of switching points.

² Almost all participants are consistent.

³ Ninety-two (95.83%) participants are consistent.

⁴ One participant is inconsistent.

⁵ Only data from consistent participants are used. We drop one datapoint from a participant switching in the opposite direction.

⁶ The results look qualitatively similar if we estimate a random effects logit model that explains choices on individual problems.

⁷ Note that gains from cooperation are not endogenous. Switching points compress choices. We explain choices with (expected) gains from cooperation. At a participant’s switching point, the expected gain from cooperation is given by the sum of gains from all games up to this point, divided by 11.

⁸ 58% cooperate, the mean belief is 59.81%.

⁹ In the regressions, results look very similar if we do not transform variables, but directly work with the switching points for loss aversion, risk aversion and the dictator game.

¹⁰ We lose two observations for participants who are inconsistent on the test for risk aversion.