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Compensating the cooperators: Is sorting in the prisoner's dilemma possible?

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  • Bohnet, Iris
  • Kübler, Dorothea

Abstract

Choice between different versions of a game may provide a means of sorting, allowing players with different preferences to self-select into groups of similar types. We experimentally investigate whether auctioning off the right to play a prisoner's dilemma game in which the cost of unilateral cooperation is lower than in the status quo version separates (conditional) cooperators from money maximizers. After the auction, significantly more subjects cooperate in the modified PD than in the status quo PD whereas there is no difference between cooperation rates if the two versions of the game were assigned to participants. However, sorting is incomplete and cooperation deteriorates over time. The auction price does not correspond to the differences in expected values between the modified and the status quo game.

Suggested Citation

  • Bohnet, Iris & Kübler, Dorothea, 2000. "Compensating the cooperators: Is sorting in the prisoner's dilemma possible?," SFB 373 Discussion Papers 2001,2, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    • Handle: RePEc:zbw:sfb373:20012
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    6. Guido, Andrea & Robbett, Andrea & Romaniuc, Rustam, 2019. "Group formation and cooperation in social dilemmas: A survey and meta-analytic evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 192-209.
    7. Michalis Drouvelis & Julian C. Jamison, 2015. "Selecting public goods institutions: Who likes to punish and reward?," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 501-534, October.
    8. Serdarevic, Nina & Strømland, Eirik & Tjøtta, Sigve, 2021. "It pays to be nice: The benefits of cooperating in markets," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    9. Gunnthorsdottir, Anna & Houser, Daniel & McCabe, Kevin, 2007. "Disposition, history and contributions in public goods experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 304-315, February.
    10. Andrea Robbett, 2016. "Community dynamics in the lab," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(3), pages 543-568, March.
    11. Jason A. Aimone & Laurence R. Iannaccone & Michael D. Makowsky & Jared Rubin, 2013. "Endogenous Group Formation via Unproductive Costs," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1215-1236.
    12. Grimm, Veronika & Mengel, Friederike, 2011. "Matching technology and the choice of punishment institutions in a prisoner's dilemma game," Journal of Economic Behavior & Organization, Elsevier, vol. 78(3), pages 333-348, May.
    13. Mary L. Rigdon & Kevin A. McCabe & Vernon L. Smith, 2007. "Sustaining Cooperation in Trust Games," Economic Journal, Royal Economic Society, vol. 117(522), pages 991-1007, July.
    14. Dannenberg, Astrid & Gallier, Carlo, 2019. "The choice of institutions to solve cooperation problems: A survey of experimental research," ZEW Discussion Papers 19-021, ZEW - Leibniz Centre for European Economic Research.
    15. Astrid Dannenberg & Carlo Gallier, 2019. "The Choice of Institutions to Solve Cooperation Problems: A Survey of Experimental Research," MAGKS Papers on Economics 201911, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    16. Ertaç, Seda & Hortaçsu, Ali & Roberts, James W., 2011. "Entry into auctions: An experimental analysis," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 168-178, March.
    17. Grimm, Veronika & Mengel, Friederike, 2009. "Cooperation in viscous populations--Experimental evidence," Games and Economic Behavior, Elsevier, vol. 66(1), pages 202-220, May.
    18. Frédéric Schneider & Roberto A. Weber, 2013. "Long-term commitment and cooperation," ECON - Working Papers 130, Department of Economics - University of Zurich.
    19. Cooper, David J. & Ioannou, Christos A. & Qi, Shi, 2018. "Endogenous incentive contracts and efficient coordination," Games and Economic Behavior, Elsevier, vol. 112(C), pages 78-97.
    20. Peter Werner, 2010. "The Dynamics of Cooperation in Group Lending - A Microfinance Experiment," Working Paper Series in Economics 49, University of Cologne, Department of Economics.

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    More about this item

    Keywords

    Auctions; Experiments; Prisoner's dilemma game; Sorting; Conditional cooperation;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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