The Effect of Issue Linkage on Cooperation in Bilateral Conflicts: An Experimental Study with Relevance to Transboundary Water

Environmental bilateral conflicts, such as in international environmental agreements, often involve more than one conflictive issue that requires solution. The theoretical literature suggests that linking issues of conflict open new opportunities for cooperation. We present a new experimental setting of bilateral conflicts, in which each issue is modeled as a different prisoner dilemma game. In two experiments, the effect of issue linkage on cooperation is evaluated by comparing a treatment in which the two games are played sequentially (isolated treatment) with one where they are played simultaneously (linked treatment). Specifically, in the linked treatment each agent observes the payoffs from playing the different paths across games (e.g., cooperate in game1 but defect in game2) and then act accordingly by committing to one of these paths. We differentiate the case where issue linkage implies symmetrical payoffs across games (Experiment 1), from the asymmetric case where one agent receives higher benefits from issue linkage (Experiment 2). The results reveal that issue linkage increase mutual cooperation and decrease mutual defection. We also find that asymmetry reduces the level of cooperation in both isolated and linked games, yet issue linkage facilitates higher cooperation rate even when the payoffs are asymmetric.