Reputation and cooperation in social dilemma games

A human solution to the problem of cooperation is the maintenance of informal reputation hierarchies. Reputational information contributes to cooperation by providing guidelines about previous group-beneficial or free-rider behaviour in social dilemma interactions. How reputation system emerges, however, remains a puzzle. The dissertation tests two dimensions of a reputation system that affect the establishment of a credible reputation system: (i) if direct benefit can be earned for reputation it has to be a scarce resource or (ii) if it is not earned for direct benefits good reputation should not be restricted. Four different setups were tested in a laboratory experiment in which participants played two-person Prisoner’s Dilemma games without partner selection, could observe some other interactions, and could communicate reputational information about possible opponents to each other. Reputational information clearly influenced cooperation decisions. Although cooperation was not sustained at a high level in any of the conditions, the possibility of exchanging third-party information was able to temporarily increase the level of strategic cooperation when reputation was a scarce resource and reputational scores were directly translated into monetary benefits. Competition for monetary rewards or unrestricted non-monetary reputational rewards helped the reputation system to be informative. Finally, high reputational scores are reinforced further as they are rewarded with positive messages, and positive gossip was leading to higher reputations. Communication about previous acts and passing on reputational information could be valuable for conditional action in cooperation problems and pose a punishment threat to defectors. It is an open question, however, what kind of mechanisms can make gossip honest and credible and reputational information reliable, especially if intense competition for reputations does not exclusively dictate passing on honest information. The dissertation proposes two mechanisms that could ...