Turning the Other Cheek: Leniency and Forgiveness in an Uncertain World
Posted: 15 May 2010
Date Written: May 15, 2010
Repeated cooperative interactions are central to human society. A large body of theoretical and experimental literature has shown that in repeated settings, evolution and self-interest can lead to helping others at a cost to yourself, because of reciprocity concerns (i.e. "You scratch my back, I scratch yours"). A problem for reciprocal cooperation, however, is the fact that many real world settings involve the potential for errors and misunderstandings. Was your partner's lack of cooperation intentional and deserving of punishment, or just an honest mistake? Theoretical solutions for optimal play in repeated games with error have been explored extensively, most notably the strategy "Win-Stay-Lose-Shift" (or "Perfect tit-for-tat"), but actual human behavior in such situations has received little attention. Here we present an experiment examining strategies used in the (infinitely) repeated Prisoner's Dilemma with errors. We find no evidence of Win-Stay-Lose-Shift. Instead, we find that the most common and successful cooperative strategies are variants of the classical Tit-For-Tat and Grim strategies which are lenient - they wait for their partner to defect two or three times before punishing. We also find a high level of forgiveness, where subjects are willing to return to cooperation after a breakdown has occurred (at high payoffs, Tit-For-Tat variants are favored over Grim variants). In a world of imperfect actions, it can pay to be slow to anger and fast to forgive.
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