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Habits of Virtue: Creating Norms of Cooperation and Defection in the Laboratory
What explains variability in norms of cooperation across organizations and cultures? One answer comes from the tendency of individuals to internalize typically successful behaviors as norms. Different institutional structures can cause different behavioral norms to be internalized. These norms are then carried over into atypical situations beyond the reach of the institution. Here, we experimentally demonstrate such spillovers. First, we immerse subjects in environments that do or do not support cooperation using repeated prisoner’s dilemmas. Afterwards, we measure their intrinsic prosociality in one-shot games. Subjects from environments that support cooperation are more prosocial, more likely to punish selfishness, and more trusting in general. Furthermore, these effects are most pronounced among subjects who use heuristics, suggesting that intuitive processes play a key role in the spillovers we observe. Our findings help to explain variation in one-shot anonymous cooperation, linking this intrinsically motivated prosociality to the externally imposed institutional rules experienced in other settings.
Data, as supplemental material, are available at
http://dx.doi.org/10.1287/mnsc.2015.2168
.
This paper was accepted by Uri Gneezy, behavioral economics.
Journal Article
Game Theory in Economics and Beyond
Within economics, game theory occupied a rather isolated niche in the 1960s and 1970s. It was pursued by people who were known specifically as game theorists and who did almost nothing but game theory, while other economists had little idea what game theory was. Game theory is now a standard tool in economics. Contributions to game theory are made by economists across the spectrum of fields and interests, and economists regularly combine work in game theory with work in other areas. Students learn the basic techniques of game theory in the first-year graduate theory core. Excitement over game theory in economics has given way to an easy familiarity. This essay first examines this transition, arguing that the initial excitement surrounding game theory has dissipated not because game theory has retreated from its initial bridgehead, but because it has extended its reach throughout economics. Next, it discusses some key challenges for game theory, including the continuing problem of dealing with multiple equilibria, the need to make game theory useful in applications, and the need to better integrate noncooperative and cooperative game theory. Finally it considers the current status and future prospects of game theory.
Journal Article
Focal points in negotiation
\"Focal Points in Negotiation is the first work of its kind to analyze the use of focal points beyond the controlled setting of the laboratory or the stylized context of mathematical game theory, in the real world of negotiation. It demonstrates that there are many more ways focal points influence real life situations than the specific, predetermined roles ascribed to them by game theory and rational choice. The book establishes this by identifying the numerous different, often decisive, modes in which focal points function in the various phases of complex negotiations. In doing so, it also demonstrates the necessity of a thorough understanding of focal points for mediators, negotiators, and others. A scholarly work in nature, Focal Points in Negotiation is also suitable for use in the classroom and accessible for a multidisciplinary audience\"--Back cover.
Book
Optimal Abatement Technology Licensing in a Dynamic Transboundary Pollution Game: Fixed Fee Versus Royalty
Transboundary pollution poses a major threat to environment and human health. An effective approach to addressing this problem is the adoption of long-term abatement technology; however, many developing regions are lacking in related technologies that can be acquired by licensing from developed regions. This study focuses on a differential game model of transboundary pollution between two asymmetric regions, one of which possesses advanced abatement technology that can reduce the abatement cost and licenses this technology to the other region by royalty or fixed-fee licensing. We characterize the equilibrium decisions in the regions and find that fixed-fee licensing is superior to royalty licensing from the viewpoint of both regions. The reason is that under fixed-fee licensing, the regions can gain improved incremental revenues and incur reduced environmental damage. Subsequently, we analyze the steady-state equilibrium behaviors and the effects of parameters on the licensing performance. The analysis indicates that the myopic view of the regions leads to short-term revenue maximization, resulting in an increase in total pollution stock. Moreover, a high level of abatement technology or emission tax prompts the licensee region to choose fixed-fee approach, which is beneficial both economically and environmentally for two regions.
Journal Article
Evolutionary dynamics with game transitions
The environment has a strong influence on a population’s evolutionary dynamics. Driven by both intrinsic and external factors, the environment is subject to continual change in nature. To capture an ever-changing environment, we consider a model of evolutionary dynamics with game transitions, where individuals’ behaviors together with the games that they play in one time step influence the games to be played in the next time step. Within this model, we study the evolution of cooperation in structured populations and find a simple rule: Weak selection favors cooperation over defection if the ratio of the benefit provided by an altruistic behavior, b, to the corresponding cost, c, exceeds k – k′, where k is the average number of neighbors of an individual and k′ captures the effects of the game transitions. Even if cooperation cannot be favored in each individual game, allowing for a transition to a relatively valuable game after mutual cooperation and to a less valuable game after defection can result in a favorable outcome for cooperation. In particular, small variations in different games being played can promote cooperation markedly. Our results suggest that simple game transitions can serve as a mechanism for supporting prosocial behaviors in highly connected populations.
Journal Article
Static network structure can stabilize human cooperation
Significance Human populations are both extremely cooperative and highly structured. Mathematical models have shown that fixed network interaction structures can lead to cooperation under certain conditions, by allowing cooperators to cluster together. Here, we provide empirical evidence of this phenomenon. We explore how different fixed social network structures can promote cooperation using economic game experiments. We find that people cooperate at high stable levels, as long as the benefits created by cooperation are larger than the number of neighbors in the network. This empirical result is consistent with a rule predicted by mathematical models of evolution. Our findings show the important role social networks can play in human cooperation and provide guidance for promoting cooperative behavior.
The evolution of cooperation in network-structured populations has been a major focus of theoretical work in recent years. When players are embedded in fixed networks, cooperators are more likely to interact with, and benefit from, other cooperators. In theory, this clustering can foster cooperation on fixed networks under certain circumstances. Laboratory experiments with humans, however, have thus far found no evidence that fixed network structure actually promotes cooperation. Here, we provide such evidence and help to explain why others failed to find it. First, we show that static networks can lead to a stable high level of cooperation, outperforming well-mixed populations. We then systematically vary the benefit that cooperating provides to one’s neighbors relative to the cost required to cooperate ( b / c ), as well as the average number of neighbors in the network ( k ). When b / c > k , we observe high and stable levels of cooperation. Conversely, when b / c ≤ k or players are randomly shuffled, cooperation decays. Our results are consistent with a quantitative evolutionary game theoretic prediction for when cooperation should succeed on networks and, for the first time to our knowledge, provide an experimental demonstration of the power of static network structure for stabilizing human cooperation.
Journal Article