Economic experiments reveal give-and-take behaviour

People start out being generous. But then they slowly turn into egoists as the game goes along.

This was certainly one of the outcomes of a series of economic experiments that have just been carried out at the Faculty of Social Sciences at the University of Copenhagen. In the experiments, student volunteers were paid small cash incentives in what are called ‘public good’ games, explains assistant professor Toke Fosgaard of the Institute of Food Resource and Economics (FOI).

»It tests, in controlled conditions, the social dilemma of being egoistic or social in cooperation situations«.

Read our reporter’s first-hand report of his own participation in the experiment here.

Give or keep

»The strategy that pays off better for each individual is to always keep the credits for yourself. But giving all your credits to the group account maximizes the group payoff. Here is the dilemma,« he says.

This particular public good game was organised in several rounds. Randomly selected groups of four persons were formed, with the participants not knowing who the other group members are.

Every turn, participants were given credits to keep or to put in a group account. Out of the total amount of credits in the group account, given by all group participants; each participant got an amount back to his own stash of credits that equals half of the total group account.

Start social, turn ego

The more people put in, the more everyone can win. But you can also opt to just keep credits for yourself.

In the experiment which had a University Post reporter as participant, people started putting about half of their assigned credits into the group account. However, as the rounds went by, they kept more and more to themselves, to the detriment of the common gain.

»It is normal for people to behave that way,« Toke comments. »People start out social and want to maximize the benefit for everyone, but as time progresses they realize that cooperation cannot be maintained, and they start keeping more for themselves«.

Buying makes for egoism

The experiments say a lot about teamwork.

»Imagine that a team output depends on each of your teammates’ performance. However in this case each of them are tempted to not to put all his or her effort into the team assignment and relax instead. This is, perhaps, beneficial to the individual but it hurts the team a lot«.

Other experiments have an additional focus, Toke explains: »We let some people participate in a version of the public good game where credits to the group are combined with buying private goods. By comparing these two versions of the game, we can study if people are more or less cooperative – that is if more or less credits are put into the group account.«

»It turns out that when the social dilemma decision is combined with buying a private good – such as buying mineral water in the experiment – people are relatively more egoistic.«

universitypost@adm.ku.dk

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