Proceedings of 17th ACM Conference on Economics and Computation.
12 Pages Posted: 27 Feb 2016 Last revised: 6 Jun 2016
Date Written: June 3, 2016
The human willingness to pay costs to benefit anonymous others is often explained by social preferences: rather than only valuing their own material payoff, people also care in some fashion about the outcomes of others. But how successful is this concept of outcome-based social preferences for actually predicting out-of-sample behavior? We investigate this question by having 1067 human subjects each make 20 cooperation decisions, and using machine learning to predict their last 5 choices based on their first 15. We find that decisions can be predicted with high accuracy by models that include outcome-based features and allow for heterogeneity across individuals in baseline cooperativeness and the weights placed on the outcome-based features (AUC=0.89). It is not necessary, however, to have a fully heterogeneous model -- excellent predictive power (AUC=0.88) is achieved by a model that allows three different sets of baseline cooperativeness and feature weights (i.e. three behavioral types), defined based on the participant's cooperation frequency in the 15 training trials: those who cooperated at least half the time, those who cooperated less than half the time, and those who never cooperated. Finally, we provide evidence that this inclination to cooperate cannot be well proxied by other personality/morality survey measures or demographics, and thus is a natural kind (or "cooperative phenotype")
Keywords: machine learning, social preferences, behavioral economics, prosociality
JEL Classification: C63, C70, C92
Suggested Citation: Suggested Citation
Epstein, Ziv G. and Peysakhovich, Alexander and Rand, David G., The Good, the Bad, and the Unflinchingly Selfish: Cooperative Decision-Making Can Be Predicted with High Accuracy Using Only Three Behavioral Types (June 3, 2016). Proceedings of 17th ACM Conference on Economics and Computation.. Available at SSRN: https://ssrn.com/abstract=2737983 or http://dx.doi.org/10.2139/ssrn.2737983