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

37 Pages Posted: 15 Dec 2009

See all articles by Mariana Blanco

Mariana Blanco

Universidad del Rosario

Dirk Engelmann

University of London - Royal Holloway - Department of Economics

Alexander K. Koch

University of Aarhus - Department of Economics and Business Economics; IZA Institute of Labor Economics

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics; Max Planck Institute for Research on Collective Goods

Abstract

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.

Keywords: experimental economics, consensus effect, social dilemmas

JEL Classification: C72, C90

Suggested Citation

Blanco, Mariana and Engelmann, Dirk and Koch, Alexander K. and Normann, Hans-Theo, Preferences and Beliefs in a Sequential Social Dilemma: A Within-Subjects Analysis. IZA Discussion Paper No. 4624, Available at SSRN: https://ssrn.com/abstract=1522692

Mariana Blanco (Contact Author)

Universidad del Rosario ( email )

Bogota
Colombia

HOME PAGE: http://mbnet26.googlepages.com/home

Dirk Engelmann

University of London - Royal Holloway - Department of Economics ( email )

Egham, TW20 0EX
United Kingdom

Alexander K. Koch

University of Aarhus - Department of Economics and Business Economics ( email )

Fuglesangs Allé 4
Aarhus V, 8210
Denmark

HOME PAGE: http://https://sites.google.com/site/alexanderkkoch/Home

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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