Expectations and Aspirations in Dilemma Interactions

Incentive compatibility solutions to social dilemmas change individual consequences of non-co-operative and co-operative acts such that self-maximizers will rationally choose to act in ways that promote the public good, i.e. to co-operate. The traditional selfish egoism assumption of rational choice requires dilemmas to be solved by either adding some likely punishment to defection or reward to co-operation. Dilemma co-operation can also, of course, be explained by relaxing the narrow self-interest assumption. By allowing for the possibility that outcomes of interdependent interactions are subjectively evaluated by reference to the actor's own as well as others' interests, or that people get additional utility (or avoid disutility) by following certain normative codes, co-operation in finitely repeated dilemmas can be rational. For examples of evidence of subjective transformations of given payoff matrices, see James Andreoni, ‘Giving with Impure Altrusim: Applications to Charity and Recardian Equivalence’, Journal of Political Economy, 97 (1989), 447–51; and Michael D. Kuhlman and Alfred F. J. Marshello, ‘Individual Differences in Game Motivation as Moderators of Preprogrammed Strategic Effects in Prisoner's Dilemma’, Journal of Personality and Social Psychology, 32 (1975), 922–31.