Motives behind cooperation in finitely repeated prisoner's dilemma

This paper deploys a novel experiment to compare three behavioral theories that explain both selfish and non-selfish cooperation. The three theories fuse reputational cooperation (a la Kreps et al. (1982)) with the following three non-selfish motives respectively: caring about others (Altruism), being conscientious about cooperation (Duty), and enjoying social-efficiency (Efficiency-Seeking). We use reputational cooperation under purely Selfish preferences as a fourth theory. Our experimental design varies the decline-rate of future rewards, under which these theories predict rich patterns of behavior. Based on a Finite Mixture Model, the data is best explained if the modal subject types are Selfish and Efficiency-Seeking: We estimate that 40-49% of our subjects are Selfish, 36-45% are Efficiency-seeking, and 6-20% are Altruistic. We find little evidence for Duty players.Published by Elsevier Inc.