ABSTRACT
The asymmetric matching pennies contradiction posits that contrary to the prediction of mixed-strategy Nash equilibrium, experimental subjects' choices are, in practice, based heavily on the magnitudes of their own payoffs. Own-payoff effects are robustly confirmed in the literature. Closely following the experimental setups in the literature which support the contradiction, we conduct a series of asymmetric matching pennies games in China, hypothesizing play which is closer to equilibrium frequencies than previously found. Contrary to previous experiments which were conducted in the United States, we find that there are essentially no own-payoff effects among Row players who face large payoff asymmetry. In a Quantal Response Equilibrium framework allowing for altruism or spite, the behavior of our subjects corresponded to a positive spite parameter, whereas the results of previous studies corresponded to altruism. Our results may be consistent with recent psychology literature that finds people from collectivist cultures are substantially more adept at taking the perspective of others compared with people from individualist cultures, a feature of the reasoning needed to obtain mixed-strategy equilibrium.
ABSTRACT
Sustaining cooperation in social dilemmas is a fundamental objective in the social and biological sciences. Although providing a punishment option to community members in the public goods game (PGG) has been shown to effectively promote cooperation, this has some serious disadvantages; these include destruction of a society's physical resources as well as its overall social capital. A more efficient approach may be to instead employ a reward mechanism. We propose an endogenous reward mechanism that taxes the gross income of each round's PGG play and assigns the amount to a fund; each player then decides how to distribute his or her share of the fund as rewards to other members of the community. Our mechanism successfully reverses the decay trend and achieves a high level of contribution with budget-balanced rewards that require no external funding, an important condition for practical implementation. Simulations based on type-specific estimations indicate that the payoff-based conditional cooperation model explains the observed treatment effects well.
Subject(s)
Cooperative Behavior , Models, Economic , Reward , HumansABSTRACT
Zero-determinant (ZD) strategies, as discovered by Press and Dyson, can enforce a linear relationship between a pair of players' scores in the iterated prisoner's dilemma. Particularly, the extortionate ZD strategies can enforce and exploit cooperation, providing a player with a score advantage, and consequently higher scores than those from either mutual cooperation or generous ZD strategies. In laboratory experiments in which human subjects were paired with computer co-players, we demonstrate that both the generous and the extortionate ZD strategies indeed enforce a unilateral control of the reward. When the experimental setting is sufficiently long and the computerized nature of the opponent is known to human subjects, the extortionate strategy outperforms the generous strategy. Human subjects' cooperation rates when playing against extortionate and generous ZD strategies are similar after learning has occurred. More than half of extortionate strategists finally obtain an average score higher than that from mutual cooperation.
