Social Preferences Under the Shadow of the Future

54 Pages Posted: 22 Jun 2020

See all articles by Felix Kölle

Felix Kölle

University of Cologne - Department of Economics

Simone Quercia

University of Bonn

Egon Tripodi

University of Essex; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 8, 2020

Abstract

Social interactions predominantly take place under the shadow of the future. Previous literature on infinitely repeated games has highlighted the primary role of self-interested strategic considerations in explaining outcomes. Using indefinitely repeated prisoner’s dilemma games, this paper demonstrates experimentally the importance of social preferences for achieving efficient cooperative outcomes. Sorting agents by their pro-sociality, we find that cooperation is three to four times higher among prosocial players compared to selfish players. We also show that social preferences are less important when individuals interact in mixed populations. This can explain why the influence of social preferences has not been detected in previous studies.

Keywords: cooperation, infinitely repeated game, prisoner’s dilemma, social preferences, experiment

JEL Classification: C73, C91, C92

Suggested Citation

Kölle, Felix and Quercia, Simone and Tripodi, Egon, Social Preferences Under the Shadow of the Future (June 8, 2020). Available at SSRN: https://ssrn.com/abstract=3622125 or http://dx.doi.org/10.2139/ssrn.3622125

Felix Kölle

University of Cologne - Department of Economics ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://https://felixkoelle.weebly.com/

Simone Quercia

University of Bonn ( email )

Institute for Applied Microeconomics
Adenauerallee 24 - 42
Bonn, 53113
Germany

Egon Tripodi (Contact Author)

University of Essex ( email )

Wivenhoe Park
Colchester, Essex CO4 3SQ
United Kingdom

HOME PAGE: http://egontripodi.com

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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