When best-replies are not in equilibrium: understanding cooperative behaviour
AbstractTo understand cooperative behaviour in social-dilemma experiments, we need to understand the game participants play not only in monetary but in preference terms. Does a Nash-prediction based on participants' actual preferences describe their behaviour in a public-good experiment well? And if not, where does the observed behaviour diverge from the prediction? This study provides an environment which allows to answer these questions: when making their contribution decision, participants are informed about their co-playersÕ priorly-elicited conditional contribution preferences. This induces common knowledge of preferences and thereby leads to direct experimental control over the game participants play. Results show that most people play best-responses to their beliefs. At the same time, beliefs in a third of the cases do not correspond to an equilibrium prediction that is based on the elicited conditional-cooperation preferences. Moreover, more often than not, beliefs are empirically inaccurate. This holds true even in a treatment that gives participants the option to look up the set of equilibria of their game.
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Bibliographic InfoPaper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 88.
Date of creation: 2013
Date of revision:
Public good; social dilemma; Nash-equilibrium; rational beliefs; conditional cooperation; social preferences.;
Other versions of this item:
- Irenaeus Wolff, 2013. "When best-replies are not in Equilibrium: Understanding Cooperative Behaviour," Working Paper Series of the Department of Economics, University of Konstanz 2013-28, Department of Economics, University of Konstanz.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-01-17 (All new papers)
- NEP-CBE-2014-01-17 (Cognitive & Behavioural Economics)
- NEP-CDM-2014-01-17 (Collective Decision-Making)
- NEP-EVO-2014-01-17 (Evolutionary Economics)
- NEP-EXP-2014-01-17 (Experimental Economics)
- NEP-GTH-2014-01-17 (Game Theory)
- NEP-HPE-2014-01-17 (History & Philosophy of Economics)
- NEP-SOC-2014-01-17 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicklisch, Andreas & Wolff, Irenaeus, 2012.
"On the nature of reciprocity: Evidence from the ultimatum reciprocity measure,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 84(3), pages 892-905.
- Andreas Nicklisch & Irenaeus Wolff, 2012. "On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure," Working Paper Series of the Department of Economics, University of Konstanz 2012-27, Department of Economics, University of Konstanz.
- Andreas Nicklisch & Irenaeus Wolff, 2011. "On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure," TWI Research Paper Series 65, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
- Andreas Nicklisch & Irenaeus Wolff, 2012. "On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure," TWI Research Paper Series 79, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
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