From The Physics of Finance July 11, 2014:
Very interesting paper published yesterday in Nature.
It's an experimental paper, reporting the results of a cooperation game
in which people try (of course!) to cooperate, but also have incentives
to cheat and take more for themselves. If each pursues his or her own
ends without regard for others, there's a tragedy of the commons in
which a common pool resource gets wiped out. It takes cooperation and
control over selfish actions to avoid disaster for everyone. Lots of
experiments have looked at such matters before, of course. This one adds
a twist.
The twist is to make the experiment more relevant to some of the tricky
issues we face today in thinking about climate change, how to preserve
the environment, etc. Someone who is today 60 years old doesn't have the
same personal stake in avoiding climate change as someone who is 10,
because the older one is much more likely to be dead by the time serious
effects kick in. The twist in the experiment is to include this
cooperation between generations effect. In effect, the experiment probes
our abilities to cooperate with the future -- with people we will never
meet. Clever idea to try to do this in an experiment, and I think
they've managed it quite well.
Oliver Hauser and colleagues placed volunteers into groups of five
people, which they called "generations." In a typical run of the game,
they would give the first generation a common pool of 100 units of
wealth, with each of the five individuals in this generation able to
"extract" between 0 and 20 wealth units from this pool. Their choice
entirely as individuals. The people know that the wealth pool will be
passed on to future generations ONLY if the current generation extracts
no more than half of it (50 units). Hence, individuals caring about the
future generation could choose to extract, say, 10 or fewer units, while
those not caring could just take 20.
The individuals were told that there actually would be a future
generation with some probability p -- say, 0.8. Hence, there's a 20%
chance that the game will just end, so no need to worry about future the
generation, and 80% it won't, in which case the wealth resource will or
will not be passed on depending how people act in this generation. This
game repeats for a number of generations as determined by the random
process (on average 5 for p = 0.8).
So, what happens? The research was designed to look at two different
scenarios. First, where people just act as they want to without any
further pressures on their behavior, and second, in the presence of
various kinds of mechanisms designed to help them cooperate more
effectively, preserving the resource through generations. The results
are interesting:
1. Anything goes -- no institutions at all
In this case, everything goes to the dogs immediately. Interestingly,
many people aren't wholly greedy and readily reduce the amount they
extract so as to preserve the resource for the next generation of total
strangers. The study found that over 20 separate trials, about 68% of
the individuals extracted no more than 10 units. Even so, this wasn't
enough the overcome the anti-social actions of a greedy minority which
extracted so many units that the common pool vanished fairly quickly. In
this set of experiments, there were second generations in 18 games, and
only in 4 of them was the pool passed on intact through one generation.
In the other 14 it was immediately wiped out by over-extraction.
Lesson: people aren't all bad, most have pretty good intentions, but the
persistent efforts of a small minority of greedy cheaters is enough to
mess everything up. In no single case did the common resource pool
persist past 4 generations....MORE
