Altruistic behavior has been defined in economic terms as “…costly acts that confer economic benefits on other individuals” (Fehr & Fischbacher, 2003). In a prisoner’s dilemma game, cooperation benefits the group but is costly to the individual (relative to defection), yet a significant number of players choose to cooperate. We propose that people do value rewards to others, albeit at a discounted rate (social discounting), in a manner similar to discounting of delayed rewards (delay discounting). Two experiments opposed the personal benefit from defection to the socially discounted benefit to others from cooperation. The benefit to others was determined from a social discount function relating the individual’s subjective value of a reward to another person and the social distance between that individual and the other person. In Experiment 1, the cost of cooperating was held constant while its social benefit was varied in terms of the number of other players, each gaining a fixed, hypothetical amount of money. In Experiment 2, the cost of cooperating was again held constant while the social benefit of cooperating was varied by the hypothetical amount of money earned by a single other player. In both experiments, significantly more participants cooperated when the social benefit was higher.

People value rewards to others but discount those rewards based on social distance; rewards to a socially closer person are valued more than identical rewards to a socially more distant person (Jones and Rachlin, 2006). The concept of social discounting can explain cooperation and defection in two-player prisoner’s dilemma (PD) games (Axelrod, 1980). The contingencies of a PD game are such that in any single game cooperation is costly to each player herself but beneficial to the other player. From the viewpoint of each player, the costs of cooperation are fully realized, but the benefits of cooperation are discounted by the social distance to the other player. The present experiment measured cooperation and defection in two PD-game conditions with differing reward magnitudes. In one (the 1-2-3-4 condition), the cost of cooperation exceeded its socially discounted benefit, and players were predicted to defect; in the other (the 1-2-9-10 condition), the discounted benefit of cooperation exceeded its cost, and players were predicted to cooperate. Over the course of repeated trials defection increased with the 1-2-3-4 condition but not with the 1-2-9-10 condition. Moreover, participants who rated their partners as closer, relative to random classmates, cooperated at higher rates – consistent with social discounting.

If a repeated gamble is subjectively structured into units each consisting of a string of consecutive losses followed by a single win, longer strings will necessarily be less valuable. Longer, less valuable strings will be discounted by delay more than will shorter, more valuable strings. This implies that the whole gamble's expected, delay-discounted value will increase as delay discounting increases. With this restructuring, even games of (objectively) negative expected value, such as those at casinos, may be subjectively positive. The steeper the delay discounting, the greater the subjective value of the gamble (over normal ranges of discounting steepness). Frequent gamblers, who value gambles highly, would thus be expected to discount delayed rewards more steeply than would nongamblers.

Prior research has suggested that recipients of generosity behave more generously themselves (a direct social influence). In contrast, there is conflicting evidence about the existence of indirect influence (i.e., whether interacting with a recipient of generosity causes one to behave more generously), casting doubt on the possibility that altruistic behavior can cascade through social networks. The current study investigated how far selfish and generous behavior can be transmitted through social networks and the cognitive mechanisms that underlie such transmission. Participants played a sequence of public goods games comprising a chain network. This network is advantageous because it permits only a single, unambiguous path of influence. Furthermore, we experimentally manipulated the behavior of the first link in the chain to be either generous or selfish. Results revealed the presence of direct social influence, but no evidence for indirect influence. Results also showed that selfish behavior exerted a substantially greater influence than generous behavior. Finally, expectations about future partners’ behavior strongly mediated the observed social influence, suggesting an adaptive basis for such influence.

Altruistic behavior benefits other individuals at a cost to oneself. The purpose of the present experiment was to study altruistic behavior by players (P) in 2-person iterated prisoner's dilemma games in which reciprocation by the other player (OP) was impossible, and this impossibility was clear to P. Altruism by P could not therefore be attributed to expectation of reciprocation. The cost to P of altruistic behavior was constant throughout the study, but the benefit to OP from P's cooperation differed between groups and conditions. Rate of cooperation was higher when benefit to OP was higher. Thus altruism (not attributable to expectation of reciprocation) can be a significant factor in interpersonal relationships as studied in iterated prisoner's dilemma games, and needs to be taken into account in their analysis.