Cooperation and corruption

(Versión en español aquí)

In this post I am going to briefly summarize a study recently published in PNAS by Ori Weisel and Shaul Shalvi entitled “The collaborative roots of corruption“. Cooperation has indisputable beneficial effects, but in this particular case the researchers were interested in its negative effects, and to that end they designed the following game: two people, A and B, in complete isolation and alone, have to throw a die. The subsequent procedure and payments are as follows:

Do monkeys outsmart us?

(This is an English translation of an entry I originally published in Spanish in Nada es Gratis, the leading economic blog in Spanish. Therefore, versión española is here)

A topic often featured in Nada es Gratis is the experimental evidence about different hypotheses or ideas. This is because in the last decades experimental (or behavioral) economics is becoming an important subfield of economics, aiming to understand how we behave in certain situations through an experimental approach. Therefore, readers of Nada es Gratis won’t find it strange that I am talking about this… except for the fact that I am going to discuss experiments with our closest relatives: primates, and in particular chimpanzees. The result is going to surprise you (or maybe not, in fact I’m not surprised by it): we people are dumber than monkeys!

Yes, the driver of cooperation in dynamic networks is nothing but reputation

(Versión en español aquí)

In the very first post of this blog, I already introduced the idea of dynamic networks as a way out of the lack of experimental evidence on the promotion of cooperation by the structuring of the interactions (although recently an experiment has shown that there might be some such promotion when the temptation to defect is small, you should expect a post about this at some point soon). Recently, we set out to check exactly how this worked by looking at the effect of reputation, i.e., of the information given to experimental subjects about previous actions of their possible partners. This is described in our website Nectunt, under “Dynamic Networks and Reputation”, and has appeared a few weeks ago as Reputation drives cooperative behaviour and network formation in human groups, by José A. Cuesta, Carlos Gracia-Lázaro, Alfredo Ferrer, Yamir Moreno and Angel Sánchez, Scientific Reports 5, 7843 (2015). In a nutshell, what we found there is that the possibility to change links, by itself, does not promote cooperation; it has to be combined with information on the past actions of partners in order to induce a more cooperative behavior.

It is therefore very nice to report here a confirmation of this result, that has just appeared: The effects of reputational and social knowledge on cooperation, by Edoardo Gallo and Chang Yan, Proceedings of the National Academy of Sciences of the USA 112, 3647-3652 (2015). We knew about this work prior to publication, thanks to our common friend Antonio Cabrales who learned from Edo what they were doing and put us in contact, and we had a nice exchange of ideas. Later, I was external examiner of Chang’s Ph D Thesis at Oxford, which I enjoyed very much. Thus, it is a pleasure to talk about their work here.

Obstacles for cooperation: dishonesty and the banking industry

Trust is one of the key factors affecting the emergence and sustainability of cooperation. As stated, for instance, by Acedo and Gomila, “In evolutionary game theory and experimental economics, the notion of trust is much simpler: it is an expectation about another’s behavior, a kind of wager, in which the sense of mutual commitment and vulnerability is completely absent” (see their paper here). Therefore, the fact that a certain group of people or type of companies are dishonest is a very important finding, and more so if we are speaking of so crucial a sector as the banking industry. This is what Alain Cohn, Ernst Fehr and Michel A. Maréchal set out to find with an experiment, whose results are reported in a 2014 paper entitled “Business culture and dishonesty in the banking industry“.

(Versión en español aquí)

Cooperation, the cost of information and dynamic networks

This being the first post of Nectunt Blog, the companion blog to Nectunt, the website devoted to disseminate our research on cooperation, it feels only appropriate to touch upon one of the topics we have been scrutinizing more intensely: the role of networks on the promotion (or not) of cooperation. This line of research originates on a paper published by Martin Nowak and Robert May in 1992, in which they carried out numerical simulations showing that under certain circumstances cooperators could survive in a Prisoner’s Dilemma game played on a lattice. Our group has contributed very much to clarifying this issue with much theoretical and experimental work, and as you can see in our website, nowadays it is more or less clear that the fact that players play a Prisoner’s Dilemma only with their neighbors on a network does not in general help cooperation to prevail. However, a series of recent experimental works (e.g., this one or this one) have shown that, when the network of contacts can be arranged by the players, cooperation may indeed succeed. The rationale behind this result is rather intuitive: by cutting links with them, the population can in fact ostracize defectors, so players realize that only by cooperating (at least frequently) can they keep their connections and benefit from playing the game.

(Versión en español aquí)