Problem 8 - Cooperation

Question 1

games

Answer 1

-interaction between 2 or more agents each of whom have 2 or more strategies available (which are associated with payoffs that depend on the action of the other person)

Question 2

Prisoner’s dilemma

- cooperation

Answer 2

• nash equilibrium
• both silent -> one year
• both betray each other -> 5
• only one talks -> 10 for one

Question 3

Public goods game

Answer 3

• everyone gets money
• each individual decides how much to contribute to the pool
• > pool is later divided and given back
• best collectively rational strategies is to contribute
• best individual strategy is not to contribute

Question 4

Dictator game

Answer 4

• 2 anonymous players are allotted a sum of money in a one shot interaction
• Player 1 decides how to divide the money between the two
• Player 2 receives allocation, game ends
• pure measure of intrinsic motivation for equal offers

Question 5

ultimatum game

Answer 5

• 2 anonymous players are allotted a sum of money
• Player 1 decides how to divide the money between the two
• Player 2 accepts/rejects possible offers before hearing the actual offer
• If he/she doesn’t accept, no one gets anything
• both players know in advance the consequences of accepting/rejecting

Question 6

Third-party punishment game ??

Answer 6

• 2 anonymous players are allotted a sum of money
• Player 1 decides how to divide the money
• Player 2 has no choice
• Player 3 ?

Question 7

Evolution of cooperation

Answer 7

-downing strategy

Question 8

factors influencing extent of cooperation (7)

Answer 8

1) consideration of others
2) empathy
3) fear
4) differences in values
5) Trust
6) Generosity
7) Communication

Question 9

consideration of others - cooperation

Answer 9

• less cooperation when it was known that the other cooperated (from 37% to 16%)
• thinking harder about a task reduces cooperation (more likely to behave fairly when less capacity for thinking)

Question 10

Empathy

Answer 10

-critical for social functioning and promotes prosocial behavior
-empathic failures
-empathy alone may be insufficient to produce pro-social behavior (esp. when parties differ in status/power)
-

Question 11

Fear

Answer 11

• of being taken for a sucker (too nice) / being punished for acting in self-interest
• fear is removed -> behave in a greedy fashion
• greed -> stronger effect on behavior than fear
• observing a fair player being punished -> pain-related brain areas are activated

Question 12

differences in values

Answer 12

• categorization of social value orientation
  1) prosocial -> maximise joint gains , equality in outcomes
  2) individualists -> maximise own gains
  3) competitors -> maximise relative gain
• values can be learned
• social values orientations are based on our attachment style, family background, age and experience

Question 13

trust - key word

Answer 13

• trust leads to increased cooperation
• more likely to trust people with good reputation
• emotions affect trust ratings of others (except for family members)

Question 14

moralistic punishment

Answer 14

• fosters group cooperation

- punishment of non-cooperators -> motivates them to cooperate

Question 15

Antisocial punishment

-key word

Answer 15

• punishment of high cooperators
• > destabilizes group cooperation and reduces beneficial effects of moralistic punishment
• to stop high co-operators from looking too good
• force them to cooperate less
• to stop the antisocial punisher from looking selfish in comparison
• the stronger the rule of law/strong norms of civic cooperation = less antioscial punishment

Question 16

antisocial punishment: do-gooder derogation

Answer 16

• putting down of morally motivated others
• people who help others get criticized and ridiculed for their efforts
• prevents escalation of generosity
• risky tactic as it can make oneself look bad if done poorly

Question 17

normative theory

Answer 17

punishment of all deviators no matter in which direction

Question 18

biological markets theory

Answer 18

• organisms can choose partners for cooperative interactions
• > best partners are most able, willing, and available to provide benefits in cooperative interactions
• organisms outbid each other to be chosen as partners

Question 19

nash equilibrium

Answer 19

• two or more players
• > each player is assumed to know the equilibrium strategies of the other players
• > no player has anything to gain by changing only their own strategy

Question 20

tit for tat strategy

Answer 20

• begins with cooperating (nice) and then always copies the action of the other, resulting in punishment of defection and rewarding cooperation
• > Drawback: noise (erroneous , fehlerhaft), which can (unwillingly) lead to a cycle of never ending retaliation (Heimzahlung)

Question 21

Generosity

Answer 21

• großzügig
• in some situations people are not able to act generously (if it requires resources that they don’t have)
• > this is where communication comes into play

Question 22

communication

Answer 22

-can solve the problem of noise and can ‘erase’ it

-

Question 23

Chicken problem

Answer 23

• involves two people drive towards each other
• who first turns the wheel is the chicken
• > 2 nash equilibria:
  1) Player 1 drives straight, player 2 turns the wheel
  2) Player 2 drives straight, player 1 turns the wheel
• related to real live situations including helping behavior, free-riding and the diffusion of responsibility when more than 2 people are involved

Question 24

Article: economics and greed

-> general conclusion

Answer 24

-Does business school education contribute to the culture of greed?

• > positive relationship between economics education and attitudes toward greed
• perceptions of greed and willingness to engage in (and justify) greedy behavior are malleable

Question 25

economics and greed | -> study one

Answer 25

do we need to know studies?

Question 26

psychological models of emotion - appraisal theory

Answer 26

-emotions = adaptive responses elicited based on how a person evaluates his situation -appraisals are typically related to motivational goals of the person -

Question 27

game theoretical models of emotion - simple guilt model

Answer 27

-a player feels guilty to the extent that his actions cause a coplayer to receive less than he expected

Question 28

anger

Answer 28

- connected to frustration - > player A blames player B for not cooperating and thus player becomes frustrated and angry - differences in expectation and outcome -> anger-> drives costly punishment - fear of punishment/revenge ensures cooperation

Question 29

article - higher social class predicts increased unethical behavior -results

Answer 29

- upper-class individuals: - greater resources, freedom, independence - > increases self-focused social-cognitive tendencies - worse at identifying others’ emotions - less generous and altruistic - Donate smaller proportions of their income to charity - value their own welfare over the welfare of others ``` ⇒ upper-class people behaved more unethical in naturalistic and laboratory settings ⇒greed is a robust determinant of unethical behavior ```

Question 30

Why are upper-class individuals more prone to unethical behavior?

Answer 30

- relative independence from others - increased privacy in their professions - > may provide fewer constraints and decreased risk perception - independent self-view and entitlement reduce attention on the consequences of one's actions on other - increases goal focus

Question 31

The brain and altruism, trust, fairness etc.

Answer 31

- activation in reward-related brain areas - PFC : - > cognitive control - > processing of emotions - > integration of costs and benefits to resolve conflict between self-interest and other-regarding motives

Question 32

cognitive control -brain areas (4)

Answer 32

- vmPFC - ACC- anterior cingulate cortex - anterior insula - DLPFC

Question 33

vmPFC

Answer 33

- crucial role in decision making involving social preferences - integration of costs and benefits - lesioned..?

Question 34

ACC- anterior cingulate cortex

Answer 34

- conflict monitoring | - activity consistent with trade-off between self-interest and prosocial motives

Question 35

Anterior insula

Answer 35

- activity associated with degree of emotional resentment (Groll) of unfair offers - stronger activity -> more likely to reject an offer

Question 36

DLPFC

Answer 36

- affects fairness related behaviors, not judgement - controls emotional impulse to reject unfair offers - when out of order -> increases acceptance of unfair offers

Question 37

reward-related brain areas (4)

Answer 37

- striatum - nucleus accumbens - VTA - Oxytocin

Question 38

game theory

Answer 38

analyzing possible interactions between people

Question 39

behavioral game theory

Answer 39

-people are actually more cooperative than game theory predicts

Question 40

downing strategy

Answer 40

-selfish -you either start by cooperation OR defection -

Question 41

guilt

Answer 41

appraisal : failure to live up to expectations | -> individual wants to make up for failure

Question 42

simple trust game

Answer 42

- choose to go out/ in game - if going out -> both get 1|1 - if going in -> - can choose to share money (2|2) - can choose to have everything (4|0) - > other one expects to get money - > person donates because he/she would feel guilty otherwise

Question 43

neuro economic approach

Answer 43

- combination of neuroscience and economics | - social

Question 44

theories of reciprocity and inequity aversion

Answer 44

- subjects prefer mutual cooperation outcomes over defection - derive a hedonic value - ventral striatum

Question 45

social preference theories

Answer 45

- prefer to punish unfair behavior - rewarding for yourself - explains altruistic punishment - PFC

Question 46

culture

Answer 46

- people in industrialized countries are more cooperative | - punishment behaviors varied

Question 47

social neuro economics - key words

Answer 47

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Question 48

fairness - key word

Answer 48

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