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Cooperation among behaviorally heterogeneous players in social dilemma with stay of leave decisions

Listed author(s):
  • Xiaochuan Huang

    ()

    (DT Capital Management Co., Ltd.)

  • Takehito Masuda

    ()

    (Institute of Economic Research, Kyoto University)

  • Yoshitaka Okano

    ()

    (School of Economics and Management, Kochi University of Technology)

  • Tatsuyoshi Saijo

    ()

    (School of Economics and Management, Kochi University of Technology)

We experimentally test a two-stage mechanism called the stay-leave mechanism to achieve cooperation in n-plyer prisoner's dilemma situations. Under this mechanism, each cooperator has the chance to revise his choice when players' choices are not unanimous. We say a player is selfish if he eliminates dominated choices in each stage. If all participants of the stay-leave mechanism are selfish, for any value of public good benefit that arises, the unique equilibrium is unanimous cooperation. The average cooperation rate in the stay-leave mechanism experiment averaged 86.6% across 15 periods, with an upward trend, increasing to 96.0% after period 5. By examining earlier period data, we detected that selfish and conditionally cooperative subjects coexist at a proportion of approximately 3:1. Finally, we extended our model to incorporate a mixture of the observed two types and misbeliefs about others' types. Paradoxically, unanimous cooperation is less likely to occur as the number of conditionally cooperative players increase. The model also partially explains the observed upward trend in the cooperation rate in the stay-leave mechanism sessions.

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File URL: http://www.kier.kyoto-u.ac.jp/DP/DP944.pdf
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Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 944.

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Length: 28pages
Date of creation: Jul 2016
Handle: RePEc:kyo:wpaper:944
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