Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300405 
Year of Publication: 
2024
Series/Report no.: 
CeDEx Discussion Paper Series No. 2024-04
Publisher: 
The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx), Nottingham
Abstract: 
We experimentally examine how incentives affect conditional cooperation (i.e., cooperating in response to cooperation and defecting in response to defection) in social dilemmas. In our first study, subjects play eight Sequential Prisoner's Dilemma games with varying payoffs. We elicit second mover strategies and find that most second movers conditionally cooperate in some games and free ride in others. The rate of conditional cooperation is higher when the own gain from defecting is lower and when the loss imposed on the first mover by defecting is higher. This pattern is consistent with both social preference models and stochastic choice models. In a second study subjects play 64 social dilemma games, and we jointly estimate noise and social preference parameters at the individual level. Most of our subjects place significantly positive weight on others' payoffs, supporting the underlying role of social preferences in conditional cooperation. Our results suggest that conditional cooperation is not a fixed trait but rather a symptom of the interaction between game incentives and underlying social preferences.
Subjects: 
sequential prisoner's dilemma
conditional cooperation
social preferences
JEL: 
A13
C91
Document Type: 
Working Paper

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