Who Cooperates in Repeated Games: The Role of Altruism, Inequity Aversion, and Demographics

52 Pages Posted: 16 Oct 2012 Last revised: 16 May 2014

See all articles by Anna Dreber

Anna Dreber

Stockholm School of Economics - Department of Economics

Drew Fudenberg

Massachusetts Institute of Technology (MIT)

David G. Rand

Massachusetts Institute of Technology (MIT)

Date Written: September 30, 2011

Abstract

We explore the extent to which altruism, as measured by giving in a dictator game (DG), accounts for play in a noisy version of the repeated prisoner’s dilemma. We find that DG giving is correlated with cooperation in the repeated game when no cooperative equilibria exist, but not when cooperation is an equilibrium. Furthermore, none of the commonly observed strategies are better explained by inequity aversion or efficiency concerns than money maximization. Various survey questions provide additional evidence for the relative unimportance of social preferences. We conclude that cooperation in repeated games is primarily motivated by long-term payoff maximization and that even though some subjects may have other goals, this does not seem to be the key determinant of how play varies with the parameters of the repeated game. In particular, altruism does not seem to be a major source of the observed diversity of play.

Keywords: cooperation, prisoner’s dilemma, altruism, social preferences, dictator game, inequity aversion, survey

JEL Classification: C72, C91, D03

Suggested Citation

Dreber, Anna and Fudenberg, Drew and Rand, David G., Who Cooperates in Repeated Games: The Role of Altruism, Inequity Aversion, and Demographics (September 30, 2011). Journal of Economic Behavior and Organization, Vol. 98, 2014. Available at SSRN: https://ssrn.com/abstract=1752366 or http://dx.doi.org/10.2139/ssrn.1752366

Anna Dreber

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
Sveavagen 65
S-113 83 Stockholm
Sweden

Drew Fudenberg (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

David G. Rand

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

HOME PAGE: http://www.daverand.org

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