Skip to main content
SpringerLink
Log in

Intelligence promotes cooperation in long-term interaction: experimental evidence in infinitely repeated public goods games

  • Regular Article
  • Published:
Journal of Economic Interaction and Coordination Aims and scope Submit manuscript

Abstract

A growing body of literature in experimental economics examines how cognitive ability affects cooperation in social dilemma settings. We contribute to the existing literature by studying this relationship in a more complex and strategic environment when the number of partners increases in an infinitely repeated public goods game. We designed four treatments with different continuation probability under two conditions: whether cooperation can be sustained as risk dominance or not. We asked participants to decide whether to cooperate in every period in the first five rounds. They were further asked to decide if they should elicit their strategy at the beginning of each super game using the strategy method in the last five rounds. We found that participants with greater cognitive abilities cooperated more (less) when cooperation could (not) be sustained as risk dominance. A similar trend was observed in the frequency of fully cooperative strategies. We also found that participants with greater cognitive abilities employed lenient and forgiving strategies more frequently when the continuation probability was far higher than the risk dominant threshold level.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4

Similar content being viewed by others

Availability of data and materials

Supplementary material is available at journal’s website.

Notes

  1. In addition, some studies have examined the impact of monitoring (Aoyagi et al. 2019) and group matching methods (Duffy and Ochs 2009) in infinitely repeated PD games.

  2. Players using GRIM will cooperate if all partners cooperate; otherwise, they defect.

  3. Carlsson and Van Damme (1993) and Kim (1996) explore Harsanyi and Selten’s (1988) notion of RDE in two-person to n-person games.

  4. The procedure for calculating the threshold value of continuation probability for GRIM to be supported as an RDE is shown in Appendix A.

  5. The strategy method for infinitely repeated games was introduced by Selten (1967). Vespa (2020) extended the strategy method into a one-period-ahead strategy method, and Romero and Rosokha (2018) introduced the constructing strategy method. There is still no evidence that players employ strategies beyond two-period-ahead histories (or above) in infinitely repeated PG games. Hence, to reduce players’ difficulty in eliciting strategies, we used the one-period-ahead strategy method to investigate the one-period-ahead history strategies in an infinitely repeated PG game following Dal Bó and Fréchette (2019) and Vespa (2020).

  6. The 16 selected questions are commonly used in Japan and Europe (see Hanaki et al. 2016) These 16 questions are selected from all 48 questions, arranged from easy to difficult.

  7. We also used the strategy frequency estimation method (Dal Bó and Fréchette 2011) to estimate strategies under the direct response method. The results are reported in Appendix C. We thank Dal Bó and Fréchette (2011) and Bigoni et al. (2015) for providing their code for strategy estimation.

  8. We report the results of experimental data from the strategy method (rounds 6 to 10) in Table A12 in Appendix D.

  9. We also conducted the unconditional logistic regression of cooperation rate, with HCA participants as the dummy independent variable, without controlling for demographic variables and robust standard errors clustered by group. The results are illustrated in Table A18 and Table A20 in Appendix E.

  10. All regression results are illustrated in Table A11 and A13 in Appendix D.

  11. In the results of the unconditional logistic regression (i.e., without controlling demographic variables), in the strategy method (simulation) in Treatment 2, the average cooperation rate of HCA participants and LCA participants were not statistically significant in period 1 (HCA: 21% and LCA: 22%) and all periods (HCA: 17% and LCA: 17%).

  12. In the results of the unconditional logistic regression (i.e., without controlling demographic variables), in the strategy method (simulation) in Treatment 3, the average cooperation rate of HCA participants is higher than that of LCA participants in both period 1 (HCA: 44% and LCA:39%) and all periods (HCA: 22% and LCA: 20%) with statistically significant.

  13. In the results of unconditional logistic regression (i.e., without controlling demographic variables), in the strategy method (simulation) in Treatment 4, the average cooperation rate of HCA participants and LCA participants were not statistically significant in period 1 (HCA: 46% and LCA: 41%) and all periods (HCA: 27% and LCA: 19%).

  14. We also conducted an unconditional logistic regression of strategy types, with HCA participants as the dummy independent variable, without controlling for demographic variables and robust standard errors. The results are illustrated in Table A21 to A23 in Appendix E.

  15. All regression results are illustrated in Table A14 to A16 in Appendix D.

  16. In the results of unconditional logistic regression (i.e., without controlling demographic variables), in Treatment 4, the frequency of fully cooperative strategies among HCA participants and LCA participants was not statistically significant (HCA: 31% and LCA: 18%).

References

  • Al-Ubaydli O, Jones G, Weel J (2016) Average player traits as predictors of cooperation in a repeated prisoner’s dilemma. J Behav Exp Econ 64:50–60

    Article  Google Scholar 

  • Aoyagi M, Bhaskar V, Fréchette GR (2019) The impact of monitoring in infinitely repeated games: perfect, public, and private. Am Econ J Microecon 11(1):1–43

    Article  Google Scholar 

  • Barreda-Tarrazona I, Jaramillo-Gutiérrez A, Pavan M, Sabater-Grande G (2017) Individual characteristics vs. experience: an experimental study on cooperation in prisoner’s dilemma. Front Psychol 8:596

  • Bigoni M, Casari M, Skrzypacz A, Spagnolo G (2015) Time horizon and cooperation in continuous time. Econometrica 83(2):587–616

    Article  Google Scholar 

  • Blonski M, Ockenfels P, Spagnolo G (2011) Equilibrium selection in the repeated prisoner’s dilemma: axiomatic approach and experimental evidence. Am Econ J Microecon 3(3):164–92

  • Brañas-Garza P, García-Muñoz T, González RH (2012) Cognitive effort in the beauty contest game. J Econ Behav Org 83(2):254–260

    Article  Google Scholar 

  • Carlsson H, Van Damme E (1993) Equilibrium selection in stag hunt games. Frontiers of game theory 237

  • Carpenter J, Graham M, Wolf J (2013) Cognitive ability and strategic sophistication. Games Econ Behav 80:115–130

    Article  Google Scholar 

  • Dal Bó P, Fréchette GR (2011) The evolution of cooperation in infinitely repeated games: experimental evidence. Am Econ Rev 101(1):411–29

  • Dal Bó P, Fréchette GR (2019) Strategy choice in the infinitely repeated prisoner’s dilemma. Am Econ Rev 109(11):3929–52

  • Dreber A, Fudenberg D, Rand DG (2014) Who cooperates in repeated games: the role of altruism, inequity aversion, and demographics. J Econ Behav Org 98:41–55

    Article  Google Scholar 

  • Duffy J, Ochs J (2009) Cooperative behavior and the frequency of social interaction. Games Econom Behav 66(2):785–812

    Article  Google Scholar 

  • Fischbacher U (2007) z-tree: Zurich toolbox for ready-made economic experiments. Exp Econ 10(2):171–178

    Article  Google Scholar 

  • Fréchette GR, Yuksel S (2017) Infinitely repeated games in the laboratory: four perspectives on discounting and random termination. Exp Econ 20(2):279–308

  • Fudenberg D, Rand DG, Dreber A (2012) Slow to anger and fast to forgive: cooperation in an uncertain world. Am Econ Rev 102(2):720–749

    Article  Google Scholar 

  • Gill D, Prowse V (2016) Cognitive ability, character skills, and learning to play equilibrium: a level-k analysis. J Polit Econ 124(6):1619–1676

    Article  Google Scholar 

  • Hanaki N, Jacquemet N, Luchini S, Zylbersztejn A (2016) Fluid intelligence and cognitive re ection in a strategic environment: evidence from dominance-solvable games. Front Psychol 7:1188

    Article  Google Scholar 

  • Harsanyi JC, Selten R et al (1988) A general theory of equilibrium selection in games. MIT Press Books, 1

  • Jones G (2008) Are smarter groups more cooperative? Evidence from prisoner’s dilemma experiments, 1959–2003. J Econ Behav Org 68(3–4):489–497

    Article  Google Scholar 

  • Kawamura T, Ogawa K (2019) Cognitive ability and human behavior in experimental ultimatum games. Res Econ 73(1):97–106

    Article  Google Scholar 

  • Kim Y (1996) Equilibrium selection inn-person coordination games. Games Econom Behav 15(2):203–227

    Article  Google Scholar 

  • Lugovskyy V, Puzzello D, Sorensen A, Walker J, Williams A (2017) An experimental study of finitely and infinitely repeated linear public goods games. Games Econom Behav 102:286–302

    Article  Google Scholar 

  • Palfrey TR, Rosenthal H (1994) Repeated play, cooperation and coordination: an experimental study. Rev Econ Stud 61(3):545–565

    Article  Google Scholar 

  • Proto E, Rustichini A, Sofianos A (2019) Intelligence, personality, and gains from cooperation in repeated interactions. J Polit Econ 127(3):1351–1390

    Article  Google Scholar 

  • Raven JC (1936) Mental tests used in genetic studies: The performance of related individuals on tests mainly educative and mainly reproductive. Unpublished master’s thesis, University of London

  • Romero J, Rosokha Y (2018) Constructing strategies in the indefinitely repeated prisoner’s dilemma game. Eur Econ Rev 104:185–219

  • Sell J, Wilson RK (1999) The maintenance of cooperation: expectations of future interaction and the trigger of group punishment. Soc Forces 77(4):1551–1571

    Article  Google Scholar 

  • Selten R (1967) Die strategiemethode zur erforschung des engeschraänkt rationalen verhaltens im rahmen eines oligopolexperiments. H. Sauermann (Ed.), Beiträge zuer experimentellen wirtschaftsforschung (pp. 136–168). Tübingen: J. C. B. Mohr

  • Tan L, Wei L (2014) Voluntary contribution mechanism played over an infinite horizon. Pac Econ Rev 19(3):313–331

    Article  Google Scholar 

  • Vespa E (2020) An experimental investigation of cooperation in the dynamic common pool game. Int Econ Rev 61(1):417–440

    Article  Google Scholar 

Download references

Acknowledgements

We would like to thank the editor, the co-editor, and the anonymous referees. We are grateful to Takanori Ida, Kazuhito Ogawa, Hajime Kobayashi, Tadashi Sekiguchi, Hisaki Kono, Yohei Mitani, Masaki Aoyagi, Nobuyuki Hanaki and Masao Ogaki, as well as the participants at the International Workshop for Lab and Field Experiments and the 21st Experimental Social Sciences Conference, Kansai University for their helpful conversations and comments. We thank the Kansai University Center for Experimental Economics for the use of experimental laboratories and participant recruiting system. Research support was provided by Japan Society for the Promotion of Science KAKENHI Grant Numbers (JP17J03485, JP20H05631). The experiment reported in this paper is approved by Research Ethic Committee at The Research Institute for Socionetwork Strategies (RISS), Kansai University.

Funding

We gratefully acknowledge the financial support from Japan Society for the Promotion of Science KAKENHI Grant Numbers (JP17J03485, JP20H05631).

Author information

Authors and Affiliations

  1. Faculty of Economics and Business Management, Tezukayama University, Nara, Japan

    Tetsuya Kawamura

  2. Graduate School of Economics and Faculty of Economics, Kyoto University, Kyoto, Japan

    Tiffany Tsz Kwan Tse

Authors
  1. Tetsuya Kawamura
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Tiffany Tsz Kwan Tse
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

The authors contributed equally to this work.

Corresponding author

Correspondence to Tiffany Tsz Kwan Tse.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest.

Ethics approval

The experiment reported in this paper is approved by Research Ethic Committee at The Research Institute for Socionetwork Strategies (RISS), Kansai University.

Consent to participate

All participants signed the consent form to agree to participate this experiment.

Consent for publication

All participants signed the consent form to agree to publish the experimental data under the condition of anonymity.

Code availability

Code used in analysis is available at journal’s website.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary Information

Below is the link to the electronic supplementary material.

Supplementary file 1 (pdf 943 KB)

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Kawamura, T., Tse, T.T.K. Intelligence promotes cooperation in long-term interaction: experimental evidence in infinitely repeated public goods games. J Econ Interact Coord 17, 927–946 (2022). https://doi.org/10.1007/s11403-022-00352-x

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11403-022-00352-x

Keywords

JEL Classification

Search

Navigation