THE RISK OF BEING A ‘SUCKER’ STOPS US FROM CO-OPERATING: Evidence from prisoner's dilemma games

01 Dec 2018

Concerns that we will be exploited by other people lie at the heart of what prevents us from behaving in a co-operative way. That is the central conclusion of research by Friederike Mengel, published in the December 2018 issue of The Economic Journal.

 

Her study collects experimental data from nearly 100 games played by over 3,500 people across six different countries, in which the participants choose whether or not to co-operate and are rewarded according to the collective outcomes.

 

The evidence indicates that co-operation rates are high whenever the game presents low risk of being exploited. But there are differences between women and men: if risk is low, then women tend to be more co-operative than the average man; and if it is high, they tend to be less co-operative.

 

Co-operation is an essential aspect of life – from bacterial bio-films to social insects, and from friendships and workplace collaborations to environmental conservation, political participation and international relations. Yet establishing co-operation in a competitive world suffers from two closely connected problems.

 

For one, there is the risk of co-operators being the ‘sucker’ – one of the few people co-operating while everyone else ‘free-rides’ on their efforts. But we also all face the temptation to follow our self-interest and free ride on others ourselves.

 

The new study shows that in many situations it is not so much temptation, but instead the risk of being the ‘sucker’ that prevents people from co-operating. Hence it is not because we are greedy or because human nature is evil that we often fail to co-operate. Instead, most of the time, it is our worry about being exploited by others that keeps us from co-operating.

 

To study co-operation under controlled conditions, scientists use ‘economic games’, in which participants are given money and choose how much (if any) to spend on benefitting others.

 

One such game is the prisoner’s dilemma game. In this game, two people choose between two actions: co-operate or defect. Crucially, each of them has to choose without knowing what the other is choosing. If both co-operate, they both get a good payoff, if both defect, their payoff is lower.

 

So far, things seem easy: it is better for both to co-operate. The dilemma lies in the fact that each is best off if they defect while the other person co-operates (temptation) and they are worst off if they co-operate while the other person defects (risk).

 

Because of the simplicity of the game and how it captures the trade-off between self-interest and collective interest, the prisoner’s dilemma has been studied for over 50 years in areas as diverse as Biology, Economics, Political Science, Physics, Psychology and Sociology as a workhorse to understand civic behaviour or why people co-operate in social dilemma situations.

 

The new research collects data from 96 different prisoner’s dilemma games played with more than 3,500 people across six different countries.

 

The study finds that co-operation rates are high whenever the game presents low risk. This is particularly the case in so-called one-shot games where participants interact only once and don’t have the possibility to establish a reputation. By contrast, the extent of temptation does not seem to be too important in these games.

 

Do risk and temptation affect both women and men equally? The answer is ‘No’. If risk is low, then women tend to be more co-operative than the average man; and if it is high, they tend to be less co-operative. This also means that there is no universal answer on whether women or men are more co-operative. It depends on the underlying risk.

 

As situations of social dilemma involve a tension between self-interest and group interest that is at the heart of many interactions, including the effort put in by members of teams, tax compliance, public good provision or simply good citizenship behaviour, this research has potential implications for the design of policies.

 

If policy-makers can reduce the risk associated with co-operating – for example, via information campaigns or direct transfers – then this is likely to be more promising than attempts to reduce temptation.

 

Risk and Temptation: A Meta-study on Prisoner's Dilemma Games’ by Friederike Mengel.

 

Friederike Mengel

University of Essex | 01206-873417 | fr.mengel@gmail.com