Essays on conditional cooperation

This thesis consists of three chapters, studying the role of reciprocity and the nature of conditional cooperation. In Chapter 1, we theoretically investigate how reciprocity can be modelled so that it remains compatible with a wide range of experimental findings. We introduce a new definition of kindness with two components in our model: intentional kindness and consequential kindness. We also propose a new definition of efficient strategy that resolves paradoxes found in earlier behavioural models. Finally, we show that our framework reflects the results of a host of laboratory games, including the ultimatum game and the sequential prisoner’s dilemma, which neither standard theory nor existing reciprocity models can fully explain. In Chapter 2, we experimentally study conditional cooperation, an instance of reciprocity that is particularly applicable to social dilemmas. Reciprocity can be broadly defined as taking a more altruistic action in response to a more generous action. This chapter aims to better understand the nature of conditional cooperation and in turn the nature of reciprocity, given that existing models of reciprocity fail to explain some of the empirical regularities. We use sequential prisoner's dilemma games to conduct a thorough study on payoffs that can potentially affect conditional cooperation. We experimentally investigate conditional cooperation by considering generosity separately in terms of first-mover payoffs and second-mover payoffs, which has not been done previously. We find that both aspects of generosity are present and affect the choices of the second-mover. The findings suggest the need for richer frameworks of reciprocity than those are currently used. In Chapter 3, we further analyze the nature of conditional cooperation in sequential prisoner's dilemma games using revealed preference methods. We disentangle context-free quasi-monotone preferences—where individuals prefer choices that improve their own payoff at least as much as they do for others—from conditional cooperation. By definition, conditional cooperation is context-dependent and closely tied to reciprocity. To capture this, we propose the concept of reciprocal preferences, which reflects how varying contexts affect conditional cooperation. Our model offers a method for identifying conditional cooperation in experimental settings.