Bayesian analysis of deterministic and stochastic prisoner’s dilemma games
Journal Title: Judgment and Decision Making - Year 2009, Vol 4, Issue 5
Abstract
This paper compares the behavior of individuals playing a classic two-person deterministic prisoner’s dilemma (PD) game with choice data obtained from repeated interdependent security prisoner’s dilemma games with varying probabilities of loss and the ability to learn (or not learn) about the actions of one’s counterpart, an area of recent interest in experimental economics. This novel data set, from a series of controlled laboratory experiments, is analyzed using Bayesian hierarchical methods, the first application of such methods in this research domain. We find that individuals are much more likely to be cooperative when payoffs are deterministic than when the outcomes are probabilistic. A key factor explaining this difference is that subjects in a stochastic PD game respond not just to what their counterparts did but also to whether or not they suffered a loss. These findings are interpreted in the context of behavioral theories of commitment, altruism and reciprocity. The work provides a linkage between Bayesian statistics, experimental economics, and consumer psychology.
Authors and Affiliations
Howard Kunreuther, Gabriel Silvasi, Eric T. Bradlow and Dylan Small
Keywords
Related Articles
- EP ID EP677693
- DOI -
- Views 177
- Downloads 0
Reflection increases belief in God through self-questioning among non-believers
The dual-process model of the mind predicts that religious belief will be stronger for intuitive decisions, whereas reflective thinking will lead to religious disbelief (i.e., the intuitive religious belief hypothesis)....
Ability, chance, and ambiguity aversion: Revisiting the competence hypothesis
Individuals are often ambiguity-averse when choosing among purely chance-based prospects (Ellsberg, 1961). However, they often prefer apparently ambiguous ability-based prospects to unambiguous chance-based prospects. Ac...
The beauty of simple models: Themes in recognition heuristic research
The advantage of models that do not use flexible parameters is that one can precisely show to what degree they predict behavior, and in what situations. In three issues of this journal, the recognition heuristic has been...
Emerging sacred values: Iran’s nuclear program
Sacred values are different from secular values in that they are often associated with violations of the cost-benefit logic of rational choice models. Previous work on sacred values has been largely limited to religious...
Less-is-more effects without the recognition heuristic
Inferences consistent with “recognition-based” decision-making may be drawn for various reasons other than recognition alone. We demonstrate that, for 2-alternative forced-choice decision tasks, less-is-more effects (red...