The Role of Subsidies in Coordination Games with Interconnected Risk

Can subsidies promote Pareto‐optimum coordination? We found that partially subsidizing the cooperative actions for two out of six players in a laboratory coordination game usually produced better coordination and higher total social welfare with both deterministic and stochastic payoffs. Not only were the subsidized players more likely to cooperate (choose the Pareto‐optimum action), but the unsubsidized players increased their expectations on how likely others would cooperate, and they cooperated more frequently themselves. After removal of the subsidy, high levels of coordination continued in most groups with stochastic payoffs but declined in deterministic ones. This carry‐over disparity between the deterministic and stochastic settings was consistent with the economic theories that agents were more likely to keep the status quo option under uncertainty than without uncertainty. Hence, players with stochastic payoffs were more likely to keep the high coordination level (status quo) brought by the subsidy in the previous subsidy session. A post‐game survey also indicated that with stochastic payoffs, players focused on risk reduction. Temporary subsidies promoted lasting coordination because even after subsidy was removed, players still assumed that others players would prefer reduced risks from cooperation. With deterministic payoffs, however, the subsidy might crowd out other rationales for coordination, with many players indicating that the subsidy was the only reason for anyone to cooperate. Hence, the coordination level dropped when the subsidy was removed. Copyright © 2014 John Wiley & Sons, Ltd.     

When What You Want is What You Get: Pay Dispersion and Communal Sharing Preference

The question of whether pay structures should be compressed or dispersed remains unanswered. We argue that pay dispersion can yield uncertainty regarding others' intentions and behaviors; as a result, individuals take a greater risk trusting their group members as pay spreads widen. Accordingly, we explore the conditions under which individuals are more willing to take this risk by viewing their group members as trustworthy even when pay is dispersed. Specifically, preferences for how relationships and resources should be structured in groups should help to determine when pay dispersion relates to trustworthiness perceptions. We hypothesise that the cross‐level interaction between preferences for communal sharing (Level 1)—that is, the extent to which individuals prefer communal, egalitarian structures in their groups—and pay dispersion (Level 2) is associated with trust perceptions. Data drawn from a sample of university professors support our hypothesised cross‐level interaction, and show that when pay dispersion is greater, individuals perceive their group members as more trustworthy only when they have weak preferences for communal sharing. Our results signify the importance of individual attributes to understanding pay dispersion's effects, and show that trust is fostered when preferences and pay conditions are aligned.     

Learning to cooperate without awareness in multiplayer minimal social situations

Experimental and Monte Carlo methods were used to test theoretical predictions about adaptive learning of cooperative responses without awareness in minimal social situations—games in which the payoffs to players depend not on their own actions but exclusively on the actions of other group members. In Experiment 1, learning occurred slowly over 200 rounds in a dyadic minimal social situation but not in multiplayer groups. In Experiments 2–4, learning occurred rarely in multiplayer groups, even when players were informed that they were interacting strategically and were allowed to communicate with one another but were not aware of the game’s payoff structure. Monte Carlo simulation suggested that players approach minimal social situations using a noisy version of the win–stay, lose–shift decision rule, deviating from the deterministic rule less frequently after rewarding than unrewarding rounds.     

Why brands should fear fearful consumers: How attachment style predicts retaliation

In two surveys of adult consumers, we find that attachment styles predict consumers' reactions after brand relationships end. Specifically, ‘fearful’ consumers—those high in both attachment anxiety and avoidance—are most likely to complain to third parties, to obsess about harming the brand, and to report seeking payback against brands. Two factors mediate the effect of attachment on reactions: threats to consumers' self-image and the loss of benefits from their relationship. This is consistent with the explanation we propose: specifically, fearful individuals invest in and depend more on consumption relationships and, therefore, lose more when such relationships end.     

Emotion,Decision, and Risk: Betting on Gambles versus Betting on People

We examined the effects of two emotions, fear and anger, on risk‐taking behavior in two types of tasks: Those in which uncertainty is generated by a randomizing device (“lottery risk”) and those in which it is generated by the uncertain behavior of another person (“person‐based risk”). Participants first completed a writing task to induce fear or anger. They then made choices either between lotteries (Experiment 1) or between actions in risky two‐person decisions (Experiments 2 and 3). The experiments involved substantial real‐money payoffs. Replicating earlier studies (which used hypothetical rewards), Experiment 1 showed that fearful participants were more risk‐averse than angry participants in lottery‐risk tasks. However—the key result of this study—fearful participants were substantially less risk‐averse than angry participants in a two‐person task involving person‐based risk (Experiment 2). Experiment 3 offered options and payoffs identical to those of Experiment 2 but with lottery‐type risk. Risk‐taking returned to the pattern of Experiment 1. The impact of incidental emotions on risk‐taking appears to be contingent on the class of uncertainty involved. For lottery risk, fear increased the frequency of risk‐averse choices and anger reduced it. The reverse pattern was found when uncertainty in the decision was person‐based. Further, the effect was specifically on differences in willingness to take risks rather than on differences in judgments of how much risk was present. The impact of different emotions on risk‐taking or risk‐avoiding behavior is thus contingent on the type, as well as the degree, of uncertainty the decision maker faces. Copyright © 2010 John Wiley & Sons, Ltd.     

Too good to be true? Psychological responses to uncommon options in risk–reward environments

Risks and rewards, or payoffs and probabilities, are inversely related in many choice environments. We investigated people's psychological responses to uncommon combinations of risk and reward that deviate from learned regularities (e.g., options that offer a high payoff with an unusually high probability) as they evaluated risky options. In two experiments (N = 183), participants first priced monetary gambles drawn from environments in which risks and rewards were negatively correlated, positively correlated, or uncorrelated. In later trials, they evaluated gambles with uncommon combinations of risk and reward—that is, options that deviated from the respective environment's risk–reward structure. Pricing, response times, and (in Experiment 2) pupil dilation were recorded. In both experiments, participants took more time when responding to uncommon compared to foreseeable options or when the same options were presented in an uncorrelated risk–reward environment. This result was most pronounced when the uncommon gambles offered higher expected values compared to the other gambles in the set. Moreover, these uncommon, high‐value options were associated with an increase in pupil size. These results suggest that people's evaluations of risky options are based not only on the options' payoffs and probabilities but also on the extent to which they fit the risk–reward structure of the environment.     

Behavioural Consistency Within the Prisoner's Dilemma Game: The Role of Personality and Situation

Mixed‐motive games represent situations that confront people with a conflict between cooperative and non‐cooperative alternatives. Despite this common basis, recent research has shown that the consistency of people's choices across different mixed‐motive games is rather low. The present research examined behavioural consistency within the same mixed‐motive game, by presenting participants with a series of one‐shot Prisoner's Dilemma Games. Across this set of games, payoffs were manipulated in order to intensify or weaken the conflict between self and the other party while maintaining the game's underlying structure. Our findings indicate that significant differences in choice behaviour are observed as a function of both situational (i.e. manipulations of the Prisoner's Dilemma Game's payoff structure) and personality differences (i.e. individual differences in personality and motivational traits). Moreover, our included situational variables and personality features did not interact with each other and were about equally impactful in shaping cooperation. Crucially, however, despite the significant behavioural differences across game variants, considerable consistency in choices was found as well, which suggests that the game's motivational basis reliably impacts choice behaviour in spite of situational and personality variations. We discuss implications for theorizing on mixed‐motive situations and elaborate on the question how cooperation can be promoted. © 2018 European Association of Personality Psychology     

Eye Movements in Strategic Choice

In risky and other multiattribute choices, the process of choosing is well described by random walk or drift diffusion models in which evidence is accumulated over time to threshold. In strategic choices, level‐k and cognitive hierarchy models have been offered as accounts of the choice process, in which people simulate the choice processes of their opponents or partners. We recorded the eye movements in 2 × 2 symmetric games including dominance‐solvable games like prisoner's dilemma and asymmetric coordination games like stag hunt and hawk–dove. The evidence was most consistent with the accumulation of payoff differences over time: we found longer duration choices with more fixations when payoffs differences were more finely balanced, an emerging bias to gaze more at the payoffs for the action ultimately chosen, and that a simple count of transitions between payoffs—whether or not the comparison is strategically informative—was strongly associated with the final choice. The accumulator models do account for these strategic choice process measures, but the level‐k and cognitive hierarchy models do not. © 2015 The Authors. Journal of Behavioral Decision Making published by John Wiley & Sons Ltd.     

Social Dilemmas

In social dilemma situations, each individual always receives a higher payoff for defecting than for cooperating, but all are better off if all cooperate than if all defect. Often, however, people in social dilemmas attend more to the group's payoffs than to their own, either automatically or to behave “appropriately.” But whereas social identity elicits cooperative behaviour in dilemmas, it is generally only for the benefit of an “in‐group.” Dilemmas between groups (requiring self‐sacrificial behaviour within) are often the most extreme. Consequently, the framing and manipulation of group identity is critical to cooperation rate as demonstrated by careful laboratory experimentation.     

Self‐Harm Focus Leads to Greater Collective Guilt: The Case of the U.S.‐Iraq Conflict

Collective guilt from harm one's group has caused an out‐group is often undermined because people minimize or legitimize the harm done (i.e., they generate exonerating cognitions). When a group action has harmed both the in‐group and an out‐group, focusing people on “self‐harm”—ways in which the in‐group has harmed itself—may elicit more collective guilt because self‐harm is less likely to be exonerated. In Study 1, American participants who focused on how the invasion of Iraq had harmed the United States expressed greater collective guilt over harm inflicted on the people of Iraq than those who focused on Iraqi suffering. Study 2 showed that this effect is due to reductions in exonerating cognitions among people focused on self‐harm. We consider the implications of these findings for intergroup reconciliation, particularly in situations where two groups have been involved in open conflict.     

Are Decisions Made by Group Representatives More Risk Averse? The Effect of Sense of Responsibility

We tested the hypothesis that a sense of responsibility drives group representatives' decisions to be more risk averse compared with decisions made by individuals. The hypothesis was supported when the monetary considerations (i.e., payoff inequality and the magnitude effect) were controlled for in the potential gain domain as well as in the potential loss domain. Evidence showed that this is because the group representatives were concerned about how they would view themselves (e.g., guilt and self‐blame) and also how they would be viewed by others (i.e., to avoid being blamed and looked down upon by others). This study provided new insights into understanding group representatives' decision making under risk. Copyright © 2017 John Wiley & Sons, Ltd.     

Iranian Herbalists,But Not Cooks,Are Better at Naming Odors Than Laypeople

Odor naming is enhanced in communities where communication about odors is a central part of daily life (e.g., wine experts, flavorists, and some hunter‐gatherer groups). In this study, we investigated how expert knowledge and daily experience affect the ability to name odors in a group of experts that has not previously been investigated in this context—Iranian herbalists; also called attars—as well as cooks and laypeople. We assessed naming accuracy and consistency for 16 herb and spice odors, collected judgments of odor perception, and evaluated participants' odor meta‐awareness. Participants' responses were overall more consistent and accurate for more frequent and familiar odors. Moreover, attars were more accurate than both cooks and laypeople at naming odors, although cooks did not perform significantly better than laypeople. Attars' perceptual ratings of odors and their overall odor meta‐awareness suggest they are also more attuned to odors than the other two groups. To conclude, Iranian attars—but not cooks—are better odor namers than laypeople. They also have greater meta‐awareness and differential perceptual responses to odors. These findings further highlight the critical role that expertise and type of experience have on olfactory functions.     

A Longitudinal Study of Parental Depressive Symptoms and Coparenting in the First 18 Months

Although the negative impact of postpartum depression on parenting behaviors has been well established—albeit separately—for mothers and fathers, the respective and joint impact of both parents' mood on family‐group interactive behaviors, such as coparenting support and conflict behaviors between the parents, have not yet been investigated. The aim of this study was to examine the association between parental depressive symptoms and coparenting behaviors in a low‐risk sample of families with infants, exploring reciprocity between the variables, as well as gender differences between mothers and fathers regarding these links. At 3 (T1), 9 (T2), and 18 months postpartum (T3), we assessed both parents' depressive symptoms with a self‐report questionnaire and observed coparenting support and conflict during triadic mother–father–child interactions. The results revealed that higher maternal depressive symptoms at T1 were associated with lower support at T1 and T2. Conflict at T3 was associated with higher maternal depressive symptoms at T3 and, more surprisingly, with less depressive symptoms in mothers at T2 and fathers at T3. Cross‐lagged associations suggested that parental depressive symptoms were more likely to influence coparenting than the reverse. Moreover, maternal depressive symptoms were more likely to be linked to coparenting behaviors than were paternal depressive symptoms. These results confirm that parental—mostly maternal—depressive symptoms, even of mild intensity, may jeopardize the development of healthy family‐level relations, which previous research has shown to be crucial for child development.     

Competitive Dynamics in Forecasting: The Interaction of Skill and Uncertainty

The outcomes in many competitive tasks depend upon both skill and luck. Behavioral theories on risk taking in tournaments indicate that low‐skilled individuals may have incentives to take more risks than high‐skilled ones. We build on these theories and suggest, in addition, that when luck is more important in determining outcomes, the increase in risk taking is larger for low‐skilled than high‐skilled individuals. We test this hypothesis by analyzing stock analysts' forecasts of companies' earnings per share under market conditions that vary in volatility and thus imply different levels of luck in outcomes. Specifically, noting that forecasts that deviate widely from the consensus—which is observable by the analyst—potentially carry career‐related rewards but also reputational risks, we examine the degree of deviation from consensus exhibited by analysts of different skill levels (measured by both past forecasting accuracy and education) in different market conditions. We find that average deviations from consensus increase as markets become more volatile. At the same time, under conditions of high volatility, low‐skilled analysts exhibit larger increases in deviations from consensus than high‐skilled analysts. These field data results support our hypothesis based on of risk taking in tournaments. We discuss alternative interpretations such as, for example, self‐serving attributions and indicate directions for future research. Copyright © 2012 John Wiley & Sons, Ltd.     

Car Versus Public Transportation? The Role of Social Value Orientations in a Real-Life Social Dilemma1

This research evaluates the role of social value orientations (i.e., preferences for distribution of outcomes for the self and others) in decisions as how to commute. It was proposed that the commuting situation could be viewed either as an environmental issue, reflecting the decision structure of an N-person Prisoner's Dilemma, or as an accessibility problem, reflecting the decision structure of an N-person Chicken Dilemma. On the basis of interdependence theory (Kelley & Thibaut, 1978) it was predicted that people who are primarily concerned with the collective welfare—prosocial individuals—would prefer commuting by public transportation when other commuters were expected to go by public transportation. On the other hand, it was hypothesized that people who are primarily concerned with their own well-being—proself individuals—would prefer commuting by public transportation when others were expected to go by car. The obtained findings were consistent with these expectations. Practical and theoretical implications regarding the link between social value orientations and environmentally relevant behavior will be discussed.     

In or out? How the perceived morality (vs. competence) of prospective group members affects acceptance and rejection

When is an individual likely to be accepted or rejected by a group? This research investigates responses towards prospective group members depending on how they compare to the group in terms of their perceived morality or competence. Because morality is of particular importance to groups, we hypothesized that the perceived morality of prospective group members has more impact on the group's tendency to accept versus reject them than their competence. Across three experiments, employing self‐report, psychophysiological and behavioural measures, results supported this hypothesis: Immoral (vs. incompetent) individuals were perceived as more different from the group and were more likely to be rejected. Additionally, the rejection of prospective group members with perceived inferior morality (but not those with inferior competence) was mediated by the group threat they imply. Inclusion success thus seems to be mainly contingent upon how a group evaluates the individual's morality relative to the group's standards.     

Confidence in Dyadic Decision Making: The Role of Individual Differences

Groups typically express more confidence than individuals, yet how individual‐level confidence combines during collaborative decision tasks is not well understood. We prescreened 686 community members using a novel confidence measure (a true/false trivia test) intentionally designed to be difficult (accuracy rates were not significantly better than chance) and randomly assigned 72 individuals to collaborate on a matched version of the same test in dyads composed of two low‐confidence individuals, two high‐confidence individuals, or one of each (“mixed”). Consistent with past research, we found that the confidence expressed by dyads was higher than the confidence expressed by individuals; importantly, however, this pattern varied markedly by dyad type, with low‐confidence dyads showing the largest increase, mixed dyads showing a moderate increase, and high‐confidence dyads showing no increase—despite the fact that all dyads showed similarly low accuracy (about 55%). These results highlight the conditions under which groups express greater confidence than individuals and offer insights for the composition of collaborative decision‐making teams. Copyright © 2015 John Wiley & Sons, Ltd.     

Evaluations Versus Expectations: Children's Divergent Beliefs About Resource Distribution

Past research reveals a tension between children's preferences for egalitarianism and ingroup favoritism when distributing resources to others. Here we investigate how children's evaluations and expectations of others' behaviors compare. Four‐ to 10‐year‐old children viewed events where individuals from two different groups distributed resources to their own group, to the other group, or equally across groups. Groups were described within a context of intergroup competition over scarce resources. In the Evaluation condition, children were asked to evaluate which resource distribution actions were nicer. In the Expectation condition, children were asked to predict which events were more likely to occur. With age, children's evaluations and expectations of others' actions diverged: Children evaluated egalitarian actions as nicer yet expected others to behave in ways that benefit their own group. Thus, children's evaluations about the way human social actors should behave do not mirror their expectations concerning those individuals' actions.