Cautious Defection: Group Representatives Cooperate and Risk Less than Individuals

Journal of Behavioral Decision Making, Forthcoming

32 Pages Posted: 21 Mar 2015

See all articles by Pavel D. Atanasov

Pavel D. Atanasov

IE University; Pytho LLC

Howard Kunreuther

National Bureau of Economic Research (NBER); University of Pennsylvania - Wharton Risk Management and Decision Processes Center

Date Written: March 19, 2015

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

Suggested Citation

Atanasov, Pavel D. and Kunreuther, Howard C. and Kunreuther, Howard C., Cautious Defection: Group Representatives Cooperate and Risk Less than Individuals (March 19, 2015). Journal of Behavioral Decision Making, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2581300

Pavel D. Atanasov

IE University ( email )

Castellón de la Plana 8
Madrid, 28006
Spain

Pytho LLC ( email )

Madrid
Spain
641179247 (Phone)

HOME PAGE: http://pavelatanasov.net

Howard C. Kunreuther (Contact Author)

University of Pennsylvania - Wharton Risk Management and Decision Processes Center ( email )

3819 Chestnut Street
Suite 130
Philadelphia, PA 19104
United States
215-898-4589 (Phone)

National Bureau of Economic Research (NBER)

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