Not All Prisoner's Dilemma Games Are Equal: Incentives, Social Preferences, and Cooperation

The Prisoner's Dilemma (PD) is a classic decision problem where 2 players simultaneously must decide whether to cooperate or to act in their own narrow self-interest. The PD game has been used to model many naturally occurring interactive situations, at the personal, organizational, and social levels, in which there exists a tension between individual material gain and the common good. At least 2 factors may influence the emergence of cooperative behavior in this well-known collective action problem: the incentive structure of the game itself, and the intrinsic social preferences of each of the players. We present a framework that integrates these 2 factors in an effort to account for patterns of high or low cooperation from repeated choice interactions. In an experiment using a collection of different PD games, and a measure of individual social preferences, we identify regions of PD games in which (a) cooperation is independent of social preferences; (b) nice people can be exploited; and (c) being nice is consistently rewarded.