Cautious Defection: Group Representatives Cooperate and Risk Less than Individuals

Abstract

Individuals often make decisions that affect groups, yet the propensities of group representatives are not as well understood than those of independent decision makers or deliberating groups. We ask how responsibility for group payoffs − in the absence of group deliberation − affects the choice. The experiment utilizes the Interdependent Security Dilemma paradigm. In its deterministic version, the game is identical to a finitely repeated Prisoner’s Dilemma. In the stochastic version, potential losses are larger but uncertain, occurring with a predefined probability when one or both players choose to forgo investment in protection. Participants were assigned to play either as individuals, or as representatives of three-person groups, with each member’s choices equally likely to determine the group’s payoffs. In the deterministic condition, individuals were more likely to invest (cooperate) than group representatives (80% vs. 62% of rounds). In the stochastic condition, the pattern was reversed as representatives were slightly, but not significantly more likely to invest than individuals (46% vs. 40%). The significant interaction effect suggested that group representatives were less cooperative but also more risk-averse than individuals. A follow-up study supported this account by showing that participants who construed the invest strategy as low-risk than those who perceived this strategy to be high-risk. Overall, group representatives exhibited a tendency to act more competitively and more cautiously than individuals acting alone.

Keywords: Interdependent Security, Risk, Cooperation, Agents, Representatives, Groups

JEL Classification: C91, C92, C71