Intelligence, Personality and Gains from Cooperation in Repeated Interactions

Abstract

We study how intelligence and personality affect the outcomes of groups, focusing on repeated interactions that provide the opportunity for profitable cooperation. Our experimental method creates two groups of subjects who have different levels of certain traits, such as higher or lower levels of intelligence, Conscientiousness and Agreeableness, but who are very similar otherwise. Intelligence has a large and positive long-run effect on cooperative behavior. The effect is strong when at the equilibrium of the repeated game there is a tradeoff between short-run gains and long-run losses. Conscientiousness and Agreeableness have a natural, significant but transitory effect on cooperation rates.

Keywords: repeated prisoner’s dilemma, cooperation, intelligence

JEL Classification: C730, C910, C920