When is the Risk of Cooperation Worth Taking? The Prisoner’s Dilemma as a Game of Multiple Motives

34 Pages Posted: 22 Aug 2012 Last revised: 22 Aug 2013

See all articles by Christoph Engel

Christoph Engel

Max Planck Institute for Research on Collective Goods; University of Bonn - Faculty of Law & Economics; Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students; Universität Osnabrück - Faculty of Law

Lilia Wasserka-Zhurakhovska

University of Duisburg-Essen - Mercator School of Management; Max Planck Institute for Research on Collective Goods

Date Written: August 2013

Abstract

Both in the field and in the lab, participants frequently cooperate, despite the fact that the situation can be modelled as a simultaneous, symmetric prisoner’s dilemma. This experiment manipulates the payoff in case both players defect, and explains the degree of cooperation by a combination of five motives: the size of gains from cooperation, expectations about cooperativeness in the population in question, the degree of risk and loss aversion, and the degree by which a participant is averse to inequity. Information about these motivational forces stems from additional within subjects tests. All five factors are significant only if one controls for all the other motives, which suggests that a prisoner’s dilemma is a game jointly characterised by these five motives. The need to control for the remaining explanations seems to be the reason why earlier attempts at explaining choices in the prisoner’s dilemma with personality have not been successful.

Keywords: efficiency, Risk aversion, Conditional Cooperation, prisoner’s dilemma, Belief, Loss Aversion, Risky Dictator Game

JEL Classification: H41, C72, C91, D03

Suggested Citation

Engel, Christoph and Wasserka-Zhurakhovska, Lilia, When is the Risk of Cooperation Worth Taking? The Prisoner’s Dilemma as a Game of Multiple Motives (August 2013). MPI Collective Goods Preprint, No. 2012/16, Available at SSRN: https://ssrn.com/abstract=2132501 or http://dx.doi.org/10.2139/ssrn.2132501

Christoph Engel (Contact Author)

Max Planck Institute for Research on Collective Goods ( email )

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Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students ( email )

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Universität Osnabrück - Faculty of Law

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Lilia Wasserka-Zhurakhovska

University of Duisburg-Essen - Mercator School of Management ( email )

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Max Planck Institute for Research on Collective Goods ( email )

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Bonn, 53113
Germany

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