Valuing rewards to others in a prisoner's dilemma game

Abstract

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.

Reciprocation and altruism in social cooperation

“…In prior experiments, Stony Brook students, playing a one-shot 1-2-9-10 PD game (B in Figure 1) with hypothetical rewards and anonymous OP, indeed cooperated at a higher rate than did those playing the 1-2-3-4 PD game (A in Figure 1) (Locey, Safin, & Rachlin, 2013); a corresponding result was found for Stony Brook students playing a face-to-face IPD game with real rewards (Safin et al, 2013). However, Safin et al (2013) found a significant correlation in cooperation rates between partners in the IPD game, which suggests that reciprocation may have played a role in fostering cooperation or defection.…”

“…However, Safin et al (2013) found a significant correlation in cooperation rates between partners in the IPD game, which suggests that reciprocation may have played a role in fostering cooperation or defection. The purpose of the present experiment was to eliminate the possibility of reciprocation by OP in an IPD game and to measure cooperation by P solely as a function of its benefit to OP.…”

“…The sample size was based on previous studies (e.g., Safin et al, 2013). They were compensated with course credit and $5 to $7 based on performance.…”

“…However, again regardless of OP's choice, cooperation in Game A gave OP two units (3-1 or 4-2) while cooperation in Game B gave OP eight units (9-1 or 10-2). Note that choosing a lower gain for oneself (cooperation) was an economic loss and thus a costly act (e.g., Fehr & Fischbacher, 2003; Safin, Locey, & Rachlin, 2013). If altruism were a factor in these games, participants would be expected to cooperate more in Game B, where OP's gain was higher, than in Game A, where OP's gain was lower.…”

Discussion on the Social Rate of Discount: from Sen to Behavioural Economics

“…Persons with lower social discounting rates are more likely to choose cooperative strategy in games based on conflict of private and social interest (prisoner's dilemma, public goods game, see, e.g. Jones and Rachlin, 2009;Safin et al, 2013;Locey et al, 2013). The social discounting rate is also negatively correlated with decision maker's fluid intelligence (Osiński et al, 2014) and agreeableness (Osiński, 2009;Kirkpatrick et al, 2015), whereas it is positively correlated with decision maker's level of neuroticism (Osiński, 2009).…”