Press release: 20 <b>06</b> 2017 Press release: 20 06 2017
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Knowing more about economic gains makes people less cooperative

New experiment shows that access to earnings information hampers cooperation

Existing research suggesting that humans cooperate if they know more about their own payoffs has been rebutted: In the long run, access to information about payoff distributions leads to less cooperative behavior, finds a recent study in Nature Communications by Steffen Huck, Johannes Leutgeb (both WZB Berlin Social Science Center) and Ryan Oprea (University of California, Santa Barbara). The study also shows that knowledge about earning possibilities leads to smaller earnings in the long-run.

In their research, Huck et al. looked at the learning behavior of humans who interact in a competitive economic environment. In an experiment, the researchers assigned participants randomly into 18 pairs and instructed them to play a simple computer game with their counterparts for 600 periods. After each round, participants won points which at the end of the game could be exchanged into real money.

The researchers formed two groups of pairs: While in the first group (A) participants after each round only received information on which action the opponent player had chosen and how much points each player had gained, the second group (B) had access to more elaborate information: here, participants could see the potential payoffs they could have achieved through taking other actions. With the help of this information, participants of the second group could maximize their short-term gains much more easily than the participants in the first group.

Players in group A, lacking further information, first applied simple strategies to choose their actions, e.g. by imitating the more successful choices of their counterparts. Over time, however, players in this group leaned towards more cooperative strategies, such as matching the counterpart’s action regardless of payoffs. Players in group B, on the contrary, held on to a strategy of maximizing their short-term profit by picking the best action against their opponent’s current action.

As a result, participants with no access to payoff information were not only much more cooperative, they also generated significantly higher economic gains in the long-run: Median earnings in group A were 50% higher than in group B.

These results show that payoff information is an advantage only in the short run but hampers the learning necessary to establish more successful cooperation between humans in the long run. Study leader Steffen Huck concludes: “Systems that focus human attention on short term gains, for example through large annual bonus payments, may have similar adverse side effects. Our research shows that human cooperation is not mainly driven by rational calculation, but rather by simple heuristics. Good organisations should foster these cooperative modes of behavior rather than highlight possibilities for higher individual earnings.”

The study “Payoff information hampers the evolution of cooperation” by Steffen Huck, Johannes Leutgeb and Ryan Oprea was published in the journal Nature Communications and can be obtained at this link.

Contact

Prof. Dr. Steffen Huck
Direktor der Abteilung
Ökonomik des Wandels
fon: 030-25491-421
steffen [dot] huck [at] wzb [dot] eu

Johannes Leutgeb
Wissenschaftlicher Mitarbeiter
Abteilung Ökonomik des Wandels
fon: 030-25491-435
johannes [dot] leutgeb [at] wzb [dot] eu

Claudia Roth
Pressestelle
fon: 030-25491-510
claudia [dot] roth [at] wzb [dot] eu