Intentions versus Outcomes: Cooperation and Fairness in a Sequential Prisoner’s Dilemma with Nature

Abstract

This paper investigates the importance of concerns about intentions and outcomes in a sequential prisoner’s dilemma game with nature. In the game, there is a chance that the first mover’s choice is reversed. This allows the separation of intended actions from the resulting outcomes. Equilibrium predictions from theoretical models of fairness are tested experimentally by varying the chance the first mover’s choice is reversed and whether the second mover observes the first mover’s choice. The results show that second mover cooperation is higher when the first mover has little control over their choice and when the second mover is not told what the first mover chose. While subject behavior is consistent with concerns for both intentions and outcomes, the results indicate that these concerns work in ways not predicted by current theoretical models. In addition, I find that psychometric measures of empathic concern and perspective taking are correlated with second mover cooperation and provide potential explanations for the experimental results.