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The Effect of Positive Mood on Cooperation in Repeated Interaction

Author

Listed:
  • Proto, Eugenio

    (DepartmentofEconomics,University of Warwick, CAGE and IZA)

  • Sgroi, Daniel

    (Department of Economics, University of Warwick,CAGE and Nuffield College, University of Oxford)

  • Nazneen, Mahnaz

    (Department of Economics, University of Warwick)

Abstract

According to existing research across several disciplines (management, psychology, economics and neuroscience), positive mood can have positive effects, engendering more altruistic, open and helpful behaviour, but can also work though a more negative channel by inducing inward-orientation, assertiveness, and reduced use of information. This leaves the impact on cooperation in interactive and strategic situations unclear. We find evidence from 490 participants in a laboratory experiment suggesting that participants in an induced positive mood cooperate less in a repeated Prisoner’s Dilemma than participants in a neutral setting. This is robust to the number of repetitions or the inclusion of pre-play communication. In order to understand why positive mood might damage the propensity to cooperate, we conduct a language analysis of the pre-play communication between players. This analysis indicates that subjects in a more positive mood use more inward-oriented and more negative language which supports the negative channel.

Suggested Citation

  • Proto, Eugenio & Sgroi, Daniel & Nazneen, Mahnaz, 2017. "The Effect of Positive Mood on Cooperation in Repeated Interaction," The Warwick Economics Research Paper Series (TWERPS) 1141, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1141
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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