group cooperation under uncertainty min gong advisors: jonathan baron howard kunreuther
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Group Cooperation Under Uncertainty
Min Gong
Advisors: Jonathan Baron Howard Kunreuther
Outline Introduction and Motivation Major Finding on Group Cooperation Under
Uncertainty Study 1: Group-Individual Cooperation Difference in
Deterministic and Stochastic PD Why do Groups Cooperate More than
Individuals Under Uncertainty? Study 2: Group-Individual Risk Preference Difference Study 3: 3-Option Stochastic PD Study 4: A Survey Study
Generality Discussion and Future Research When does uncertainty reduce inter-group competition
and encourage inter-group cooperation? Future research on group factors and game factors
Key Finding
Group and Uncertai nty I nteracti on
32%
78%
52%
22%
0%
25%
50%
75%
100%
Group I ndi vi dual
Pl ayer Type
Coop
erat
ion
Rate
Determi ni sti cPri soner' s Di l emmaStochasti c Pri soner' sDi l emma
Groups are less cooperative than individuals in a prisoner’s dilemma, but more cooperative than individuals in a stochastic version of the game.
Motivation – Why Study Group Cooperation Under Uncertainty In many real-life situations, the decision makers
are nations, firms, or families
Groups behave differently from individuals with regard to cooperation and competition (Insko et al. 1987;
Bornstein et al., 2002 ; Wildschut 2003) uncertainty (Marquis 1962; Sniezek 1992)
Outline Introduction and Motivation Major Finding on Group Cooperation Under
Uncertainty Study 1: Group-Individual Cooperation Difference in
Deterministic and Stochastic PD Why do Groups Cooperate More than
Individuals Under Uncertainty? Study 2: Group-Individual Risk Preference Difference Study 3: 3-Option Stochastic PD Study 4: A Survey Study
Generality Discussion and Future Research When does uncertainty reduce inter-group competition
and encourage inter-group cooperation? Future research on group factors and game factor
Experiment Design--Subjects & Processes
2 Types of players Individual OR group player Group Player
3 members in each group A group makes one collective decision All members share the outcome equally Unanimous decisions or majority rule
Subjects: 202 subjects Between-subject 2X2 design (2 games X 2
player types)
Experiment Design – the Deterministic Prisoner’s Dilemma Negative numbers represent costs or losses The dominant strategy is Not Invest (always better
off by defecting no matter what the other party does) Nash Equilibrium is (NI, NI)
Player 2
Invest Not Invest
Player 1
Invest -45;- 45 -65;- 40
Not Invest
-40;- 65 -52;- 52
Table 1: the DPD game
Experiment Design – the Stochastic Prisoner’s Dilemma
In the SPD, each player decides whether or not to invest at a cost of 45 to reduce his or her own risk of losing 100.
If one player invests, both players’ risks are reduced. Joint cooperation eliminates uncertainty. Substituting the outcomes with the expected values the DPD.
Player 2
Invest Not Invest
Player 1
Invest -45; -45 20% lose 145,80% lose 45;
40% lose 100,60% lose 0
NotInvest
40% lose 100,60% lose 0;
20% lose 145,80% lose 45
52% lose 100,48% lose 0;
52% lose 100,48% lose 0
Player 2
Invest Not Invest
Player 1
Invest -45;- 45 -65;- 40
Not Invest
-40;- 65 -52;- 52
Table 1: the DPD gameTable 2: the SPD game
A Example of the SPD game SPD is a special case of the Interdependent
Security Game (Kunreuther and Heal, 2003) A Scenario : Baggage transfer security Pre-911
An airline has to determine whether it wants to invest in baggage security
Investing reduces its risk to be attacked by terrorists
But even if it invests, it may face a security risk from a dangerous bag loaded onto its plane by another airline, as in the Pan Am 103 crash.
Key Finding
Group and Uncertai nty I nteracti on
32%
78%
52%
22%
0%
25%
50%
75%
100%
Group I ndi vi dual
Pl ayer Type
Coop
erat
ion
Rate
Determi ni sti cPri soner' s Di l emmaStochasti c Pri soner' sDi l emma
Groups are less cooperative than individuals in the DPD, but more cooperative than individuals in the SPD.
What is Known and What is New
Replicated the “discontinuity effect”: groups cooperate less than individuals in DPD (Insko, et al 1987; Wildschut et al 2003 for a review)
Discovered a “reversed discontinuity effect”: groups cooperate more than individuals in SPD.
Survey data and recorded discussion provide explanations for both the discontinuity effect in DPD and the reversed discontinuity effect in SPD.
Why Groups Cooperate Less than Individuals (Discontinuity Effect) in DPD
Anonymity in a group shields social sanction from the other group
Defection in the name of group interest
Out-group schema on intergroup competition
At least one member identifies the dominant strategy and persuades others
Identifiability Explanation
Social Support Explanation
Schema-Based Distrust
Explanation
Smart-strategy persuasion
Explanation
Discontinuity Effect
Greater greed
Greater fear
Why Discontinuity Effect Disappears in SPD
Identifiability is the same in both games. Social support for defection is reduced in the SPD than
in DPD, because some members may consider defection too risky and not in the group interest.
Schema-based distrust is reduced in the SPD than in DPD, because group members observe reduced tendency for their own group to defect and infer that the other group is less likely to defect as well.
Smart-Strategy Persuasion power to defect is reduced in the SPD than in DPD, because with uncertainty it is harder to figure out that defect is the smart strategy and convince other members.
Why Groups Cooperate More than Individuals in SPD
- Safety Oriented to Avoid Guilt and Blame People take less risk when their decisions affect
others (Charness and Jackson 2008) In DPD
Defection is always better off No ex post guilt or blame
In SPD Defection has a higher expected payoff, but also a
higher probability of suffering a loss. If a large loss follows defection ex post guilt and ex
post blame for the one who suggested defection Group members favor safety-oriented strategy
(cooperation) to avoid ex post guilt and blame Reversed discontinuity effect
Why Groups Cooperate More than Individuals in SPD -Social Pressure to Conform to Certain Norms
Three norms are most relevant in PD games: Being pro-group, Being smart, and Being nice
Similar to the group morality and individual morality argument (Cohen 2006; Pinter 2007)
In DPD Both pro-group (group morality) and smart norm
clearly indicate defection Niceness (individual morality) is clouded
In SPD Unclear what strategy is pro-group and smart Being nice is socially desirable and more salient than
in DPD.
Major Findings of Study 1 Replicated the discontinuity effect in the DPD game. Four explanations were offered to explain the
discontinuity effect. Found a reversed discontinuity effect when
uncertainty existed: groups were more cooperative than individuals in the SPD game.
Two explanations are proposed to explain the reversed discontinuity effect: safety oriented behavior and social pressure to be nice.
Outline Introduction and Motivation Major Finding on Group Cooperation Under
Uncertainty Study 1: Group-Individual Cooperation Difference in
Deterministic and Stochastic PD Why do Groups Cooperate More than
Individuals Under Uncertainty? Study 2: Group-Individual Risk Preference Difference Study 3: 3-Option Stochastic PD Study 4: A Survey Study
Generality Discussion and Future Research When does uncertainty reduce inter-group competition
and encourage inter-group cooperation? Future research on group factors and game factor
Experiment Design
2 Types of players 36 Individuals and 50 groups Between-subject design
Play against a computer player in a SPD: The same payoff table as in Table 2 The probability of computer investing is known
Table 8: Invest Probabilities of the Computer Player in Study 2
Round Number 1 2 3 4 5 6 7 8 9 10
Probability of Investing
60%
55%
54%
53%
50%
49%
47%
42%
31%
17%
Rationale and Hypothesis
Rationale This design removed any interactive motivations for cooperation The only benefit from one player’s investment was to reduce her
own risk of suffering a loss The investment difference between groups and individuals in
Study 2 is determined by their difference in risk preference. Hypothesis
Guilt aversion and blame avoidance indicate more risk aversion and/or less risk seeking
H1: Groups are more risk concerned and invest more often than individuals in Study 2
Results at Study 2
0%
10%
20%
30%
40%
50%
60%
70%
1 2 3 4 5 6 7 8 9 10Round
Inve
stme
nt D
ecis
ion
ComputerI ndi vi dual sGroups
Major Finding and Limitations
Supporting H1, groups invested more frequently than individuals in Study 2
Cannot distinguish between group risk aversion and individual risk seeking
Group-individuals difference is smaller than in Study 1 Other reasons besides risk preference difference Groups who had similar risk preference to individuals
might invest more frequently because they had higher cooperation expectation than individuals
Outline Introduction and Motivation Major Finding on Group Cooperation Under
Uncertainty Study 1: Group-Individual Cooperation Difference in
Deterministic and Stochastic PD Why do Groups Cooperate More than
Individuals Under Uncertainty? Study 2: Group-Individual Risk Preference Difference Study 3: 3-Option Stochastic PD Study 4: A Survey Study
Generality Discussion and Future Research When does uncertainty reduce inter-group competition
and encourage inter-group cooperation? Future research on group factors and game factor
Study 3: 3-Option Stochastic Prisoner’s Dilemma
Subjects: 40 individual and 38 Groups Between-subject design Players had three options: Withdraw, or
Invest, or Not InvestOne or both players withdrew both
received a certain outcomeNo one withdrew SPD game in Table 2
Table 9: Possible outcomes in the 3-option SPD game
Player 2
Withdraw Invest Not Invest
Player 1
Withdraw -50,-50 -50,-50 -50,-50
Invest -50,-50 -45; -4520% lose 145,80% lose 45;40% lose 100,60% lose 0
Not Invest -50,-5040% lose 100,60% lose 0;20% lose 145,80% lose 45
52% lose 100,48% lose 0;52% lose 100,48% lose 0
Table 11: Player’s Decision in the 3-option SPD game
Player 1’s Expectation of Player 2
Invest (Trust) Not Invest (Distrust)
Risk Preference of Player 1
Risk Seeking
Preference: Paying 50 <Paying 45 < 40% losing 100
Preference: Paying 50 < 20% losing 100, plus paying 45 < 52% losing 100
Behavior: Not Invest
Risk Averse or
Risk Neutral
Preference: 40% losing 100 < paying 50< paying 45
Preference: 52% losing 100 < 20% losing 100, plus paying 45 < paying 50
Behavior: Invest Behavior: Withdraw
Table 12: Implications of Three Possible Decisions
Decisions Risk Preference Trust
Withdraw Risk averse or neutral Distrust
Invest Risk averse or neutral Trust
Not Invest Risk seeking Irrelevant
Hypotheses in Study 3
H2 (Individual Risk Seeking Hypothesis): Individuals choose Not Invest (Risk Seeking) more frequently than Groups do;
H3 (Group Trust Hypothesis): For those players who are risk averse or neutral, groups choose Invest (Trust) more frequently than individuals. Individuals are more likely to Withdraw (Distrust).
Figure 5: Mean Proportions of the Three Options
22%
59%
19%
14%
34%
52%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Groups I ndi vi dual s
Not I nvest (Ri skSeeki ng)Wi thdraw (Di strust)
I nvest (Trust)
Major Findings and Limitations
H2 is confirmed: groups are less risk seeking than individuals
H3 is rejected. No evidence on groups being more trusting. Uncertainty did reduce the usual inter-group distrust.
Questions remain to be answered: Are guilt aversion and blame avoidance underlying
group-individual risk preference difference? Role of social norms?
Outline Introduction and Motivation Major Finding on Group Cooperation Under
Uncertainty Study 1: Group-Individual Cooperation Difference in
Deterministic and Stochastic PD Why do Groups Cooperate More than
Individuals Under Uncertainty? Study 2: Group-Individual Risk Preference Difference Study 3: 3-Option Stochastic PD Study 4: A Survey Study
Generality Discussion and Future Research When does uncertainty reduce inter-group competition
and encourage inter-group cooperation? Future research on group factors and game factor
Study 4: A Survey Study
Three conditions Individual Survey (IS) with 32 participants; Group Private Survey (GPS) with 72 participants (24
groups); and Group Shared Survey (GSS) with 78 participants
(26 groups). Between-subject Design Each person finished a survey after the quiz and
before playing the SPD game
Group Identity, Inter-group Anticipation, and Group Trust No evidence that group membership or
anticipation of interacting with another group had an effect on players’ choice;
Partial evidence that groups might be more trusting than individuals in the SPD game, at least at the beginning of the game.
Table 13: Reasons for Not Suggesting Defection
Niceness Norm 4%
Guilt Aversion 47%
Blame Avoidance 55%
Persuasion Concern 29%
Does Not Care Enough 23%
Guilt Aversion, Blame Avoidance, and Social Norm
Summary: Why Groups Cooperated More than Individuals under Uncertainty
Guilt aversion and blame avoidance drove group members to be more cautious and less risk seeking than individuals
Mixed evidence on whether groups had higher cooperation expectation level on the other group than individuals did on the other individual
No evidence of social pressure pushing groups to be nicer and more cooperative than individuals, at least not before the group discussion
Discussion and Future Research
When does uncertainty encourage inter-group cooperation and when does it reduce inter-group competition only?
Generality Studies Group factors: decision rules, leadership,
heterogeneous groups Game factors: gain/loss domain, length of the game,
communication between players, nature of uncertainty, coordination game, multi-player games