Abstracts

Bolton, Gary; Katok, Elena; and Ockenfels, Axel. What's in a reputation? Indirect reciprocity in an image scoring game. Working Paper; Available online. [added Jun 03, 02]

Abstract: Recent theoretical work implies that members of large communities cooperate with social norms because a reputation for doing so induces indirect reciprocal benefit (as opposed to norm observance as self-sacrifice). The theoretical models differ, however, in the information content of the reputation. Our experiments show that, in line with strategic interpretations of indirect reciprocity, cooperation among strangers increases when the information about reputation is enhanced, when the cost of cooperating is decreased, and as the prospect of future interactions with other community members increases. In particular, we find that subjects condition their cooperation on the information about their partners’ past actions, the “image scores,” but that additional, recursive information about the partners’ previous partners’ image scores triggers an even stronger indirect reciprocal response. The tendency to cooperate also depends on observed actions, absent information about reputation, although this effect is largely displaced as information about image scores is made available.