Upload
francis-leslie-stevenson
View
216
Download
0
Tags:
Embed Size (px)
Citation preview
How the Emotions Enforce the Cooperative Behavior in Social Dilemma Games
Speaker林 家 仰
Before start
The main contents in this speech are discussing Prof Ernesto Reubenrsquos paper and using the materials in his courses
httpereubengooglepagescomhome
Outline
Whatrsquos experimental economics A very brief history Neuroeconomics Public goods Punishment Emotions
Whatrsquos experimental economics
A discipline in which data are collected in a controlled environment
A Brief History
Market experiments Decentralized markets
Chamberlin (1948) induced demand and cost structure Double auction
Vernon Smith (1962 1964)Game experiments Prisonerslsquodilemma 1950rsquos
Originally by psychologists and sociologists Oligopoly games
Reinhard Selten(1959)Individual choice experiments Choice under uncertainty
Savage (1954) Allais paradox (1953)
Why experimental method
Advantages of the experiments Control
Institutions (eg voting rules communication etc) Not always complete control (eg social norms)
Incentives (payoffs) Not always complete control (eg altruism)
Measure confounding variables (eg beliefs) Randomization (avoids some self-selection problems)
Replication Check for robustness experimenter effects etc Gives an incentive to do it right Make available data instructions program and procedures
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Before start
The main contents in this speech are discussing Prof Ernesto Reubenrsquos paper and using the materials in his courses
httpereubengooglepagescomhome
Outline
Whatrsquos experimental economics A very brief history Neuroeconomics Public goods Punishment Emotions
Whatrsquos experimental economics
A discipline in which data are collected in a controlled environment
A Brief History
Market experiments Decentralized markets
Chamberlin (1948) induced demand and cost structure Double auction
Vernon Smith (1962 1964)Game experiments Prisonerslsquodilemma 1950rsquos
Originally by psychologists and sociologists Oligopoly games
Reinhard Selten(1959)Individual choice experiments Choice under uncertainty
Savage (1954) Allais paradox (1953)
Why experimental method
Advantages of the experiments Control
Institutions (eg voting rules communication etc) Not always complete control (eg social norms)
Incentives (payoffs) Not always complete control (eg altruism)
Measure confounding variables (eg beliefs) Randomization (avoids some self-selection problems)
Replication Check for robustness experimenter effects etc Gives an incentive to do it right Make available data instructions program and procedures
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Outline
Whatrsquos experimental economics A very brief history Neuroeconomics Public goods Punishment Emotions
Whatrsquos experimental economics
A discipline in which data are collected in a controlled environment
A Brief History
Market experiments Decentralized markets
Chamberlin (1948) induced demand and cost structure Double auction
Vernon Smith (1962 1964)Game experiments Prisonerslsquodilemma 1950rsquos
Originally by psychologists and sociologists Oligopoly games
Reinhard Selten(1959)Individual choice experiments Choice under uncertainty
Savage (1954) Allais paradox (1953)
Why experimental method
Advantages of the experiments Control
Institutions (eg voting rules communication etc) Not always complete control (eg social norms)
Incentives (payoffs) Not always complete control (eg altruism)
Measure confounding variables (eg beliefs) Randomization (avoids some self-selection problems)
Replication Check for robustness experimenter effects etc Gives an incentive to do it right Make available data instructions program and procedures
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Whatrsquos experimental economics
A discipline in which data are collected in a controlled environment
A Brief History
Market experiments Decentralized markets
Chamberlin (1948) induced demand and cost structure Double auction
Vernon Smith (1962 1964)Game experiments Prisonerslsquodilemma 1950rsquos
Originally by psychologists and sociologists Oligopoly games
Reinhard Selten(1959)Individual choice experiments Choice under uncertainty
Savage (1954) Allais paradox (1953)
Why experimental method
Advantages of the experiments Control
Institutions (eg voting rules communication etc) Not always complete control (eg social norms)
Incentives (payoffs) Not always complete control (eg altruism)
Measure confounding variables (eg beliefs) Randomization (avoids some self-selection problems)
Replication Check for robustness experimenter effects etc Gives an incentive to do it right Make available data instructions program and procedures
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
A Brief History
Market experiments Decentralized markets
Chamberlin (1948) induced demand and cost structure Double auction
Vernon Smith (1962 1964)Game experiments Prisonerslsquodilemma 1950rsquos
Originally by psychologists and sociologists Oligopoly games
Reinhard Selten(1959)Individual choice experiments Choice under uncertainty
Savage (1954) Allais paradox (1953)
Why experimental method
Advantages of the experiments Control
Institutions (eg voting rules communication etc) Not always complete control (eg social norms)
Incentives (payoffs) Not always complete control (eg altruism)
Measure confounding variables (eg beliefs) Randomization (avoids some self-selection problems)
Replication Check for robustness experimenter effects etc Gives an incentive to do it right Make available data instructions program and procedures
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Why experimental method
Advantages of the experiments Control
Institutions (eg voting rules communication etc) Not always complete control (eg social norms)
Incentives (payoffs) Not always complete control (eg altruism)
Measure confounding variables (eg beliefs) Randomization (avoids some self-selection problems)
Replication Check for robustness experimenter effects etc Gives an incentive to do it right Make available data instructions program and procedures
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Importance
Economics is becoming an experimental science like physics and biology1048707
Like theory running experiments is an established method to explain andor describe economic activity
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Neuroeconomics
See lecture 1 on Prof Ernesto Reubenrsquos web site httpereubengooglepagescomexpteach
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Public Goods
Real-world problems of cooperation Cooperative hunting and warfare Teamwork in firms Charities and gift-giving Environmental protection Economic public goods
Paying taxes Fishing Security
Political collective action Voting Lobbying Revolutions
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
The voluntary contributions mechanism (VCM) The profit of each subject
endowment ei
Contribute to public account ci
Contributions to the public good benefit each member by αi (marginal per capita return MPCR)
Group of n members
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Reasons for cooperation
By mistake Do not understand that ci= 0 is dominant Do understand dominance but make systematic errors
Social preferences Altruism warm glow efficiency-seeking motives Conditional cooperation reciprocity
Strategic cooperation Strategies such as Tit-for-Tat can support cooperation among self
ish players mostly infinitely repeated games but see also Kreps et al (1982)
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
By mistake
Cooperating by Mistake Brandts et al 2004
Design VCM n= 4 e= 9 repeated for 10 periods 72 subjects within subjects On every period the MPCR is randomly drawn from 10
values MPCR le01875 efficient 1048707ci= 0 dominant strategy 1048707ci= 0 03125 leMPCR le09375 efficient 1048707ci= 9 dominant strategy
1048707ci= 0 MPCR ge10625efficient 1048707ci= 9 dominant strategy 1048707ci= 9
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
By mistake
Result
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Conditional Cooperation
Conditional or unconditional cooperation Fischbacher amp Gaumlcheter 2006
Design 140 subjects within subjects VCM n= 4 e= 20 MPCR = 04 2 stages strategy method and normal Decisions 1 unconditional contribution decision Decision 2 use strategy method to elicit contribution schedule with respect to a
verage contribution of decision 1 Pick randomly three decision 1rsquos and one decision 2
Predictions Altruism or lsquowarm glowrsquo contribution is positive but independent of others con
tribution Reciprocity contribution increases with the average contribution of others Selfish always contribute zero
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Conditional Cooperation
Results1048707 Little unconditional
cooperation1048707 Heterogeneity in typ
es 55 conditional co
operators 23 selfish 12 lsquohump-shapersquo
contributors 10 other
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Strategic cooperation
Is there strategic cooperation Keseramp van Winden2000
Compare partners vs strangers If partners cooperate more rarr supports strategic cooperation
Design1048707 VCM
n= 4 e= 10 25 periods MPCR = 05
160 subjects between subjects
Results Strong effect of the partnerrsquos tre
atment
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Explaining the decline in cooperation Croson 1996 Why does cooperation decline with time
Strategic cooperation Learning to play the dominant strategy
Design surprise restart VCM n= 4 e= 25 MPCR = 05 Repeated 10 + 10 periods 24 subjects
Results Clear evidence of restart specially for partners
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Punishment
The effectiveness of punishment Nikiforakis and Normann 2006
Results1048707 Punishment sustains
cooperation with a damagecost ratio greater than 211048707
Punishment increases welfare with a damagecost ratio greater than 31
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
To punish or not to punish Sanfreyet al 2003
Results Higher activation in anterior insulafor unfair hu
man offers Activation is higher with degree of unfairness
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Results Higher activation in anterior insulafor
unfair human offers Activation is higher with degree of unfair
ness Activation is highest with rejection
Higher activation in right dorsolateral prefrontal cortex Not sensitive to rejection
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Emotions
Prosocial emotions Hopfensitz and Reuben 2006
For punishment to be effective Punished subjects should switch to coop
eration Punished subjects should not punish bac
k
Design Trust game with lsquoinfinitersquo rounds of puni
shment (costs 1 to reduce 4) 2 periods perfect strangers emotions are measured before making de
cisions
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Measurement of Emotions
Is self reports a good idea experimental economists
self reports is sometimes regarded with suspicion (Smith and Walker 1993)
self reports will often overstate the true amount that individuals are will-ing to pay (Murphy et al 2005)
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Measurement of Emotions
Social psychology emotions are internal difficult to observe states self re
ports of emotions are an often used technique (Robinson and Clore 2002)
self reports of anger have been related to skin conductance levels for emotional reactions in the powe
r to take game (Ben-Shakhar et al 2007 self reported are indeed reliable can be deduced from a
recent neuroimaging study (Takahashi et al 2004)
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Measurement of Emotions
measured emotions included anger gratitude guilt happiness irritation shame and surprise
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Results first movers cooperate more often and second movers
return more in the presence of punishment
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt
Results 2nd movers cooperate after being punished only if they
feel guilt
Results Considerable retaliation after receiving punishment
40 of second movers punish back if punished 2nd movers retaliate because
They are angry and feel no guilt