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How the Emotions Enforce the Cooperative Behavior in Social Dilemma Games

How the Emotions Enforce the Cooperative Behavior in Social Dilemma Games. Speaker ： 林 家 仰. Before start. The main contents in this speech are discussing Prof. Ernesto Reuben’s paper and using the materials in his courses http://ereuben.googlepages.com/home. Outline.

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How the Emotions Enforce the Cooperative Behavior in Social Dilemma Games

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  1. How the Emotions Enforce the Cooperative Behavior in Social Dilemma Games Speaker：林 家 仰

  2. Before start • The main contents in this speech are discussing Prof. Ernesto Reuben’s paper and using the materials in his courses • http://ereuben.googlepages.com/home

  3. Outline • What’s experimental economics? • A very brief history • Neuroeconomics • Public goods • Punishment • Emotions

  4. A discipline in which data are collected in a controlled environment. What’s experimental economics?

  5. A Brief History Market experiments • Decentralized markets • Chamberlin (1948) induced demand and cost structure • Double auction • Vernon Smith (1962, 1964) Game experiments • Prisoners‘dilemma 1950’s • Originally by psychologists and sociologists • Oligopoly games • Reinhard Selten(1959) Individual choice experiments • Choice under uncertainty • Savage (1954) • Allais paradox (1953)

  6. Why experimental method • Advantages of the experiments • Control • Institutions (e.g. voting rules, communication, etc.) • Not always complete control (e.g. social norms) • Incentives (payoffs) • Not always complete control (e.g. altruism) • Measure confounding variables (e.g. beliefs) • Randomization (avoids some self-selection problems) • Replication • Check for robustness, experimenter effects, etc. • Gives an incentive to do it right • Make available: data, instructions, program, and procedures

  7. Importance • Economics is becoming an experimental science like physics and biology.􀂃 • Like theory, running experiments is an established method to explain and/or describe economic activity.

  8. Neuroeconomics • See lecture 1 on Prof. Ernesto Reuben’s web site http://ereuben.googlepages.com/expteach

  9. Public Goods Real-world problems of cooperation • Cooperative hunting and warfare • Teamwork in firms • Charities and gift-giving • Environmental protection • Economic public goods • Paying taxes • Fishing • Security • Political collective action • Voting • Lobbying • Revolutions

  10. The voluntary contributions mechanism (VCM) • The profit of each subject • endowment: ei • Contribute to public account: ci • Contributions to the public good benefit each member by: αi(marginal per capita return, MPCR) • Group of n members

  11. Reasons for cooperation • By mistake! • Do not understand that ci= 0 is dominant • Do understand dominance but make systematic errors • Social preferences • Altruism, warm glow, efficiency-seeking motives • Conditional cooperation, reciprocity • Strategic cooperation • Strategies such as Tit-for-Tat can support cooperation among selfish players • mostly infinitely repeated games but see also Kreps et al. (1982)

  12. By mistake • Cooperating by Mistake Brandts et al. 2004 • Design • VCM: n= 4, e= 9, repeated for 10 periods • 72 subjects, within subjects • On every period the MPCR is randomly drawn from 10 values • MPCR ≤0.1875: efficient 􀃆ci= 0, dominant strategy 􀃆ci= 0 • 0.3125 ≤MPCR ≤0.9375: efficient 􀃆ci= 9, dominant strategy 􀃆ci= 0 • MPCR ≥1.0625:efficient 􀃆ci= 9, dominant strategy 􀃆ci= 9

  13. By mistake • Result

  14. Conditional Cooperation • Conditional or unconditional cooperation? Fischbacher & Gächeter 2006 • Design • 140 subjects, within subjects • VCM: n= 4, e= 20, MPCR = 0.4 • 2 stages: strategy method and normal • Decisions 1: unconditional contribution decision • Decision 2: use strategy method to elicit contribution schedule with respect to average contribution of decision 1 • Pick randomly three decision 1’s and one decision 2 • Predictions • Altruism or ‘warm glow’: contribution is positive but independent of others contribution • Reciprocity: contribution increases with the average contribution of others • Selfish: always contribute zero

  15. Conditional Cooperation Results􀂃 • Little unconditional cooperation􀂃 • Heterogeneity in types: • 55% conditional cooperators • 23% selfish • 12% ‘hump-shape’contributors • 10% other

  16. Strategiccooperation • Is there strategic cooperation?Keser& van Winden2000 • Compare partners vs. strangers • If partners cooperate more → supports strategic cooperation? Design􀂃 • VCM: • n= 4, e= 10, 25 periods, MPCR = 0.5 • 160 subjects between subjects Results • Strong effect of the partner’s treatment

  17. Explaining the decline in cooperation Croson 1996 • Why does cooperation decline with time • Strategic cooperation • Learning to play the dominant strategy • Design: surprise restart • VCM: • n= 4, e= 25, MPCR = 0.5 • Repeated 10 + 10 periods • 24 subjects • Results • Clear evidence of restart specially for partners

  18. Punishment • The effectiveness of punishmentNikiforakis and Normann 2006 • Results􀂃 • Punishment sustains cooperation with a damage/cost ratio greater than 2/1􀂃 • Punishment increases welfare with a damage/cost ratio greater than 3/1

  19. To punish or not to punish Sanfreyet al. 2003 • Results • Higher activation in anterior insulafor unfair human offers • Activation is higher with degree of unfairness

  20. Results • Higher activation in anterior insulafor unfair human offers • Activation is higher with degree of unfairness • Activation is highest with rejection • Higher activation in right dorsolateral prefrontal cortex • Not sensitive to rejection

  21. Emotions Prosocial emotions Hopfensitz and Reuben 2006 • For punishment to be effective: • Punished subjects should switch to cooperation • Punished subjects should not punish back • Design • Trust game with ‘infinite’ rounds of punishment (costs 1 to reduce 4) • 2 periods, perfect strangers • emotions are measured before making decisions

  22. Measurement of Emotions • Is self reports a good idea ? • experimental economists • self reports is sometimes regarded with suspicion (Smith and Walker, 1993) • self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al., 2005)

  23. Measurement of Emotions • Social psychology • emotions are internal, difficult to observe states, self reports of emotions are an often used technique (Robinson and Clore, 2002) • self reports of anger have been related to skin • conductance levels for emotional reactions in the power to take game (Ben-Shakhar et al., 2007 • self reported are indeed reliable can be deduced from a recent neuroimaging study (Takahashi et al., 2004)

  24. Measurement of Emotions • measured emotions included: anger, gratitude, guilt, happiness, irritation, shame, and surprise.

  25. Results • first movers cooperate more often and second movers return more in the presence ofpunishment

  26. Results • 2nd movers cooperate after being punished only if they feel guilt

  27. Results • 2nd movers cooperate after being punished only if they feel guilt

  28. Results • Considerable retaliation after receiving punishment • 40% of second movers punish back if punished • 2nd movers retaliate because: • They are angry and feel no guilt

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