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Preferences and Beliefs in a Sequential Social Dilemma: A Within-Subjects Analysis

  • Blanco, Mariana

    ()

    (Universidad del Rosario)

  • Engelmann, Dirk

    ()

    (Royal Holloway, University of London)

  • Koch, Alexander K.

    ()

    (Aarhus University)

  • Normann, Hans-Theo

    ()

    (Goethe University Frankfurt)

Within-subject data from sequential social dilemma experiments reveal a correlation of first-and second-mover decisions for which two channels may be responsible, that our experiment allows to separate: i) a direct, preference-based channel that influences both first- and second-mover decisions; ii) an indirect channel, where second-mover decisions influence beliefs via a consensus effect, and the first-mover decision is a best response to these beliefs. We find strong evidence for the indirect channel: beliefs about second-mover cooperation are biased toward own second-mover behavior, and most subjects best respond to stated beliefs. But when first movers know the true probability of second-mover cooperation, subjects' own second moves still have predictive power regarding their first moves, suggesting that the direct channel also plays a role.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4624.

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Length: 37 pages
Date of creation: Dec 2009
Date of revision:
Publication status: published in: Games and Economic Behavior, 2014, 87, 122–135.
Handle: RePEc:iza:izadps:dp4624
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