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The role of payoff parameters for cooperation in the one-shot Prisoner's Dilemma

Lookup NU author(s): Dr Martin Sefton, Dr Till Weber

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Abstract

The Prisoner's Dilemma is arguably the most important model of social dilemmas, but our knowledge about how its material payoff structure affects cooperation is incomplete. We investigate the effect of variation in material payoffs on cooperation in one-shot Prisoner's Dilemma games. We report results from three experiments (N = 1,993): in a preliminary experiment, we vary the payoffs over a large range. In our first main experiment (Study 1), we present a novel design that varies payoffs orthogonally in a within-subjects design. Our second main experiment, Study 2, investigates the orthogonal variation of payoffs in a between-subjects design. In a complementary analysis we also study the closely related payoff indices of normalized loss and gain, and the K-index. A robust finding of our experiments is that cooperation increases with the gains of mutual cooperation over mutual defection.

Publication metadata

Author(s): Gächter S, Lee K, Sefton M, Weber TO

Publication type: Article

Publication status: Published

Journal: European Economic Review

Year: 2024

Volume: 166

Print publication date: 01/07/2024

Online publication date: 09/05/2024

Acceptance date: 08/05/2024

Date deposited: 17/05/2024

ISSN (print): 0014-2921

ISSN (electronic): 1873-572X

Publisher: Elsevier BV

URL: https://doi.org/10.1016/j.euroecorev.2024.104753

DOI: 10.1016/j.euroecorev.2024.104753

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