Harm on an Innocent Outsider as a Lubricant of Cooperation – An Experiment
Max Planck Institute for Research on Collective Goods; University of Bonn - Faculty of Law & Economics; Universität Osnabrück - Faculty of Law
Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods
February 1, 2012
MPI Collective Goods Preprint, No. 2012/2
If two players of a simultaneous symmetric one-shot prisoner’s dilemma hold standard preferences, the fact that choosing the cooperative move imposes harm on a passive outsider is immaterial. Yet if participants hold social preferences, one might think that they are reticent to impose harm on the outsider. This is not what we find, however severe the externality. A within-subjects measure of reticence to impose harm does not explain cooperation. But the externality makes participants more pessimistic. However conditional on their beliefs participants are more, not less cooperative if cooperation entails harm on an outsider, provided the externality is not too severe.
Number of Pages in PDF File: 27
Keywords: externality, prisoner’s dilemma, modified dictator game, beliefs
JEL Classification: C72, C91, D03, H23working papers series
Date posted: February 18, 2012 ; Last revised: April 26, 2012
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