Interlude for Behavioral Economics

At the end of the show, the team used a sort-of Prisoner's Dilemma to split their winnings: each team member chose “Friend” (cooperate) or “Foe” (defect). If one player cooperated and the other defected, the defector kept 100% of the pot. If both cooperated, each kept 50%. And if both defected, neither kept anything (this is a significant difference from the standard dilemma, where a player is a little better off defecting than cooperating if her opponent defects).

A very interesting episode of a similar game show, Golden Balls (where "Split" = "Friend", "Steal" = "Foe").

As Bruce Schneier comments:

This is the weirdest, most surreal round of "Split or Steal" I have ever seen. The more I think about the psychology of it, the more interesting it is. I'll save my comments for the comments, because I want you to watch it before I say more. Really.

Regarding the Dana, Cain and Dawes experiment, the abstract says: "Over two studies, we found that about one third of participants were willing to exit a $10 dictator game and take $9 instead. " One third is less than "the majority of participants" stated by you. A fisherman's tale?

Steve Landsburg has an interesting point about versions of the Dictator Game (and several other similar games) in which people have the option to "destroy" some or all of the money if they don't like the offer. In particular, he recently commented on the so-called "Destructor Game" ( pdf of paper here).

In this game, participants were given the option of deciding whether or not to take away some of the money that the experimenter had given to some of the other participants. When they chose to do so, the experimenters concluded that they were indulging a taste for destruction. As Landsburg sensibly points out, nothing was actually destroyed in any of these experiments. Money was simply transferred from an anonymous subject back to the experimenter.

The reason I bring this up here is because it seems like as good as place as any to get an answer to the next question - has anyone actually ever done such an experiment in which the goods to be destroyed were actually destroyed. (You can imagine giving everyone candy bars, and giving the participants the option to take someone else's candy bars and throw them into some stinking garbage heap). My instinct is that Landsburg is right, and people would be less likely to engage in destructive behaviour if they were destroying actual goods instead of just paper money, but I would be interested to see if this has ever actually been studied. Does anyone know?

The results: If you tell the second player that the first player defected, 3% still cooperate (apparently 3% of people are Jesus). If you tell the second player that the first player cooperated.........only 16% cooperate.

Is there really anything exceptional in the 3% figure? 3% of people facing a player who chose "Foe" preferred to transfer money from the game show owners to that player. 97% preferred the game show owners to keep the money. If anything, 3% is below what I would have expected. More surprising [IMO] is the fact that 16% co-operate when they know that it costs them to do so. I have no idea what that 16% were thinking.

I wonder what people do in this Ultimatum Game "variant":

Player A and B have a contest of some sort (for example, they might run a race, or play a game of checkers, or whatever), and the winner of the contest gets to be the one who makes the proposal in the Ultimatum Game.

The game theory is the same, the social context is quite different...

But this elegant simplicity was, like so many other things, ruined by the Machiguenga Indians of eastern Peru.

Wait, is this a joke, or have the Machiguenga really provided counterexamples to lots of social science hypotheses?

Old people give more than young people, and non-students give more than students

These two could both be explained by rich people giving more than poor people. Is that the case?

So generosity in the Dictator Game doesn't seem to be about wanting to help other people. It seems to be about knowing, deep down, that some anonymous person who probably doesn't even know your name and who will never see you again is disappointed in yo

We hardly need this experiment to know that people don't tend to arbitrarily give each other money for no particular reason - when was the last time you received an anonymous envelope full of cash in the mail?

Players seemed to want to play “Friend” if and only if they expected their opponents to do so. This is not rational, but it accords with the “Tit-for-Tat” strategy hypothesized to be the evolutionary solution to Prisoner's Dilemma.

Same comment as on your previous article in the series. Tit-for-Tat co-operates with a player who co-operated last time, not with a partner that it anticipates will co-operate this time.

It is reputational systems which reward correct prediction (co-operate if and only if you predict that the other player will co-operate this time). That is because the reputational damage from defecting against a co-operator is large : the co-operator gains sympathy; the defector risks punishment or reduced co-operation from other observers. Whereas if a person who is generally known to co-operate defects against another defector, there is generally not a reputational hit (indeed there is probably a slight uplift to reputation for predicting correctly and not letting the defector get away with it).

Super-rational players co-operate if and only if the other player is super-rational. If this was the strategy that humans in fact followed (i.e. there were ways in which super-rational players could reliably recognize each other) then co-operation would be pretty near universal among humans in PDs. But it isn't.

The empirical evidence (from this show, and other studies) is that humans play a reputational strategy rather than pure Tit-for-Tat or super-rational strategy. It appears to be what humans do, and there is a fairly convincing case it is what we're adapted to do.

EDIT: The other evidence you quote in your article is very interesting though:

The results: If you tell the second player that the first player defected, 3% still cooperate (apparently 3% of people are Jesus). If you tell the second player that the first player cooperated.........only 16% cooperate. When the same researchers in the same lab didn't tell the second player anything, 37% cooperated.

That suggests a mixture between reputational and super-rational strategies with a bit of "pure co-operate" thrown in as well. If there were a pure super-rational strategy then no-one would co-operate after hearing for sure that the other player had already co-operated. (This is unless they both knew for sure going into the game that the other player was super-rational; then they could both commit to co-operate regardless; it is equivalent in that case to counterfactual mugging, or to Newcomb with transparent boxes). Whereas if there were a pure reputational strategy, then knowing that the other player had co-operated would increase the probability of co-operating, not reduce it. Interesting.

I'm wondering if there are any game-theory models which predict a mixed equilibrium between super-rational and reputation, and whether the equilibrium allows a small % of "pure co-operators" into the mix as well?

Players seemed to want to play “Friend” if and only if they expected their opponents to do so.

Does this mean that a significant fraction players actually prefer the (C, C) outcome to the (D, C) outcome? What would happen if you pretended the game was PD but if there was a (D, C) result you offered the defector a (secret) chance to change their move to C? Would a lot of them accept that offer?

Actually, I'm not sure whether the extra move needs to be secret or whether it can be announced in the original rules.

So people on "Friend or Foe" turned into CliqueBots?;)

by the second season women were playing “Foe” 60% of the time against women but only 45% of the time against men (p<.01) presumably because women were perceived to be more likely to play “Friend” back

This looks backwards.

All this seems to suggest that in competitive game people aim to get as much money as possible in every decision?

The more "primitive" people just don't know the value of money. 

Its like giving candy to someone who has very little utility for it. 

Cooperation suggests merely that some people might have more built up tolerance for loss. 

It does not seem to indicate any lack of greed. 

"5% give everything to the second player, nearly doubling our previous estimate of what percent of people are Jesus"

I wonder how much "windfall" or similar circumstances around the money change how one responds. In my recent history I've had two windfall gains, one an inheritance and one the money that was being handed out as the "everyone gets a check" part of covid relief. In both cases I was happy to give the money to family who needed it more than me. 

I raise this because I don't think of myself as Jesus (not even by Scott's fairly undemanding tithing / rational altruism standards). I think the dispositive thing was really that this was windfall money; I don't think of "normal revenue" money in the same way. Would I consider money won while playing one of these games as windfall or as earned? I suspect it might be very fragile to the precise framing of the experiment...

the dictator gives much more (somewhat surprising, as this might be an excuse to keep $66 for yourself and get away with it by claiming that both players still got equal money)

I don't think it's surprising - the modified version of the game increases the amount of fuzziness that each dollar buys, but doesn't increase the pain associated with spending that dollar. So the player will spend more dollars before the pain overtakes the fuzzy.

Thanks for the great write-up.

I don't think the "spoil the setup" experiment distinguishes TDT from the belief in fairness. Just because the second person's decision comes after the first doesn't mean it has no effect on the first. It's very much like Newcomb's problem in that regard, and one of the main points of TDT was to account for that effect. Depending on the details of the rewards and how strongly you think the other player's decisions correlate with your own, it may make sense to precommit to cooperation even if you're told the other person's choice. And if it makes sense to precommit to cooperation, that's what TDT will do (unless I'm missing something).

As with the previous entries in the sequence, I like the article but strongly suggest that you add links between sequence entries.

People from “primitive” societies give more than people from more developed societies, and the more primitive the society, the stronger the effect.

I am not sure what you intended to say here, but the word "primitive" definitely looks like a red flag. As I don't think I am the only one to believe this, I would ask you to please change the wording or delete this sentence.