Séminaire KTO-GREDEG-OFCE - Kenju Kamei (Durham University)

The Perverse Costly Signaling Effect on Cooperation under the shadow of the future
Quand ? Le 28-03-2019,
de 14:00 à 15:30
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Title : The Perverse Costly Signaling Effect on Cooperation under the shadow of the future

Abstract: Lively research in social science proposes that humans can cooperate with strangers by signaling their generosity through investment in unrelated pro-social activities. I conducted a laboratory experiment with an infinitely repeated prisoner’s dilemma game with random matching to study this hypothesis. In the experiment, players decided how much to donate to the British Red Cross, and then the donation information was conveyed to matched partners in the prisoner’s dilemma. Surprisingly, the donation activities significantly undermined cooperation. This negative effect of charitable-giving was consistently observed regardless of whether players had a post-interaction opportunity to punish the partners. A detailed analysis suggests that (a) the negative effect resulted from the charitable-giving information per se, not from the fact that subjects were engaged in the charitable-giving activities, and (b) the strong negative effects were caused by mis-coordination between two parties that both can costly signal their generosity. This suggests that letting players have an implicit costly signaling opportunity through unrelated activities can backfire for the interactions among strangers. Possible ways to encourage players to use costly signaling for mutual cooperation, such as partner choice, are also discussed along with providing additional data in the paper.

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