Reputational Information in “Noisy” Interactions: Experimental Studies

1. Reputational Information in “Noisy” Interactions:Experimental Studies Motoki Watabe (Waseda University, JAPAN) Contributors: Yoshitsugu Yamamoto and Sho Tsuboi

2. What I want to say • Unconditional Cooperation strategy can produce more reliable reputational information than reciprocal strategies in noisy exchange.

3. B A EXCHANGE Observe Impression Ｘ A Model of Reputational Information Person A and B exchange their resources repeatedly. ≒ They play PD repeatedly. Person A’s reputation Source 1: A’s evaluation on him/herself Source 2: B’s evaluation on A Source 3: X’s evaluation on A

4. B A EXCHANGE Observe Impression Ｘ Reliability of Reputational Information Person A’s reputation Source 1: A’s evaluation on him/herself Source 2: B’s evaluation on A Source 3: X’s evaluation on A • Past research assume that reputational • information is always objective and reliable. • Source 1 = Source 2 = Source 3 • Intuitively, • Source 1 < Source 2 < Source 3 • Source 3 seems to be the most objective and reliable. • However, the reliability of source 3 is not always guaranteed.

5. Outline of the presentation • People have a bias of reputational information processing. • Experiment 1 • Reciprocal strategies reduce reliability of reputational in social exchange. • Unconditional strategies can produce reliable reputational information. • Experiment 2 & 3

6. B A EXCHANGE Observe Impression Ｘ A Model of Reputational Information Person A and B exchange their resources repeatedly. ≒ They play PD repeatedly. X’s impressions on A and B are reputational information to distribute other people. A is a person like @@@@@ Bseems to be*****

7. Two functions of reputation(Raub 2002, Yamagishi 1998) • Control: In order to get future exchange partners, you need to have good reputation • Learning: In order to get a good exchange partner, you need to find a person with good reputation • Given these functions, people always have motivations to establish good reputation. • Prediction • Negative reputational information is more important to predict others’ behavior than positive reputational information.

8. People have a bias of reputational information processing.

9. Number of Good Reputation Number of Bad Reputation Total Score

10. Experiment 1 • Hypothesis: People take NEGATIVE reputation more seriously than POSITIVE reputation. • Participants : Thirty seven undergraduate students • Procedure • They were in a hypothetical auction situation • They were assigned as “buyer” trying to seek a good deal for a $200-value product. • They looked at reputation of 64 sellers. • They evaluate degree of each seller’s trustworthiness as a potential partner in the hypothetical auctions.

11. Experimental Design : 64 different set of reputation Num of BAD info 0,1,2,3,8,12,24,48 この人は％くらい信頼できると思う（0から100までの数字でお答えください） 8x8=64 combinations How much impact for one increment of information この人は％くらい信頼できると思う（0から100までの数字でお答えください） Num of GOOD info 0,1,2,3,8,12,24,48

12. Analysis Take absolute Values

13. Negative information has more impact than Positive information, especially when the number of information is small

15. B A EXCHANGE Observe Impression Ｘ Reciprocal Strategies and Misunderstandings Ex.: B takes Tit-for-Tat and A takes unconditional defection. Both continue to defect except the first move. Both A and B are not Cooperative persons! ☹

16. B A EXCHANGE Observe Impression Ｘ Amplified misunderstanding by Noise Ex：Both A and C take TFT. They are actually cooperative, but it often turns out mutual defection. Noise Uhmmm… Both A and B are not cooperative! ☹ Social exchange are noisier than economic exchange (Kollock 1993)

17. Strategies producing reliable reputational information • Reciprocal strategies not good ones in terms of producing reliable reputational information • Repeated • Noisy • Question: What strategy is good for production of reliable reputational information ? • Always consistent behavior regardless others’ behavior • UnconditionalDefection (UD) • Unconditional Cooperation (UC) • UC has two advantages for creating reliable reputation.

18. No.1: UC is more likely to be recognized as UC than reciprocal strategies Strategy A UC A Noise Noisy situation Noise EXCHANGE I don’t know exactly, but Pink Person seems to be GOOD!

19. Experiment 2 Evaluate Target Person • Participant looked at the same set of players exchanging with and without noise • Hypothesis: The evaluation on UC is more consistent across with or without NOISE than the evaluation on Reciprocal strategies (TFT) Participant Noise No Noise Evaluation Evaluation Difference

20. Experiment 2 Exchange by two programmed actors コンピューター同士の交換 • Participants looked at actors playing repeated PD games (actually programmed, but they were told that the actors were real persons). • They then evaluate target actor’s trustworthiness with 7-point schale.(Beggan, Messick, & Allison, 1988) Repeated PD (10 times per set)

21. Four strategies and noise 4x4=16 combinations Exchange by two simulated actors With-Noise Condition: Each player misunderstands other’s choice with 10% of probability. Without-Noise Condition: No misunderstanding occurs

23. Experiment 2 : results • Participants: Forty seven undergraduate students • Results • UC is the most robustly evaluated strategy • F(3,135)=8.85,p<.001 • UC is the least affected by noise. • UC can produce robust reputation.

24. Situation 1 X is reciprocal strategy STR A STR X X A EXCHANGE ? ? ? ? Observers

25. No.2：UC is able to declare the other strategy’s characteristics. Situation 2 UC is UC STR A UC A EXCHANGE Cooperative A seems to be＊@xw& Vulnerable ! ! ! ! Easy to be recognized

26. Basic Idea of Expt3 Target strategies (Programmed) A ② Very exploitive • Difference between Participant’s evaluation and actual ranking of exploitiveness. • The more error, the less reliable reputational information. ① B Exploitive C ③ Less exploitive Well.. B is the Best I guess C is the worst! She wrongly evaluates A and B One error occurs. Participant

27. Independent Variables Target strategies (Programmed) A Very exploitive Three kinds of strategies B Exploitive C Not exploitive Less Error UC More Error TF2T: Defects if and only if the partner defected two times in a raw (Generous) Tit-for-Tat

28. Experiment 3 (Design) Target strategies (Programmed) A Very exploitive B Exploitive C Less exploitive

29. Procedure • Participants: Eighty six undergraduate students. • They looked at video clips that three pairs playing repeated PD game (15 times per pair) • They then prioritized the three BROWN strategies as potential partners. Target strategies (Programmed) A Very exploitive Observe & evaluate B Exploitive C Less exploitive Participant UC, TF2T, or TFT

30. Results of Experiment 3 Mean score of Error • F(2,81)=9.81,p<.001 2.5 2 1.5 1 0.5 TFT TF2T UC Pink strategy UC produces more reliable reputational Information than reciprocal strategies

31. Summary • People have a bias in reputational information processing. • Negative reputation > Positive Reputation (Expt 1) • Reciprocal strategies reduce reliability of reputational in social exchange. Unconditional strategy(UC) can produce reliable reputational information. • UC is easy to be recognized as GOOD even in noisy situation.(Expt 2) • UC makes it clear the exploitiveness of other strategies(Expt 3).

32. To do list… • How about Unconditional Defection (UD)? • My prediction • Probably, UD also has the ability to produce reliable reputational information as well as UC. • However, this ability is VERY BAD for UD to survive. • Is this ability adaptive for UC ? Useful to survive? • Already conduced a computer simulation study to find the conditions under which UC is adaptive for this bility. • Preliminary results say that UC needs help from TFT, and TFT also needs help from UC in noisy conditions.

33. Thank you ☺