Group Size Effect on Cooperation in One-Shot Social Dilemmas

Abstract

Social dilemmas are central to human society. Depletion of natural resources, climate protection, security of energy supply, and workplace collaborations are all examples of social dilemmas. Since cooperative behaviour in a social dilemma is individually costly, Nash equilibrium predicts that humans should not cooperate. Yet experimental studies show that people do cooperate even in anonymous one-shot interactions. In spite of the large number of participants in many modern social dilemmas, little is known about the effect of group size on cooperation. Does larger group size favour or prevent cooperation? We address this problem both experimentally and theoretically. Experimentally, we find that there is no general answer: it depends on the strategic situation. Specifically, we find that larger groups are more cooperative in the Public Goods game, but less cooperative in the N-person Prisoner's dilemma. Theoretically, we show that this behaviour is not consistent with either the Fehr & Schmidt model or (a one-parameter version of) the Charness & Rabin model, but it is consistent with the cooperative equilibrium model introduced by the second author.

Keywords: cooperation, public goods game, voluntary contribution, prisoner's dilemma, solution concepts, noncooperative game theory

JEL Classification: C70, C72, C92, C93, D74, H41