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

Pytho LLC

Howard Kunreuther

University of Pennsylvania - Operations, Information and Decisions Department; National Bureau of Economic Research (NBER)

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., 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

Pytho LLC ( email )

866 President Street
Brooklyn, NY 11215
United States
7173335045 (Phone)
11215 (Fax)

Howard C. Kunreuther (Contact Author)

University of Pennsylvania - Operations, Information and Decisions Department ( email )

3730 Walnut Street
558 & 559 Jon M. Huntsman Hall
Philadelphia, PA 19104-5340
United States
212-854-0423 (Phone)
215-573-2130 (Fax)

National Bureau of Economic Research (NBER)

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