Trust, Competition and Cooperation in Autism Spectrum Disorder

Objective: Impaired social interactions and repetitive behavior are key features of autism spectrum disorder (ASD). In the present study we compared social decision-making in subjects with and without ASD. Subjects performed five social decision-making games in order to assess trust, fairness, cooperation & competition behavior and social value orientation. Methods: 19 adults with autism spectrum disorder and 17 controls, matched for age and education, participated in the study. Each subject performed five social decision-making tasks. In the trust game, subjects could maximize their gain by sharing some of their money with another person. In the punishment game, subjects played two versions of the Dictator’s Dilemma. In the dictator condition they could share an amount of 0-100 points with another person. In the punishment condition, the opponent was able to punish the subject if he/she was not satisfied with the amount of points received. In the cooperation game, subjects played with a small group of 3 people. Each of them could (anonymously) select an amount of 5, 7.5 or 10 Swiss francs. The goal of the game was to achieve a high group minimum. In the competition game, subjects performed a dexterity task. Before performing the task, they were asked whether they wanted to compete (winner takes it all) or cooperation (sharing the joint achieved amount of points) with a randomly selected person. Lastly, subjects performed a social value orientation task where they were playing for themselves and for another person. Results: There was no overall difference between healthy controls an ASD subjects in investment in the trust game. However, healthy controls increased their investment over number of trials whereas ASD subjects did not. A similar pattern was found for the punishment game. Furthermore, ASD subjects revealed a decreased investment in the dictator condition of the punishment game. There were no mean differences in competition behavior and social value orientation. Conclusions: The results provide evidence for differences between ASD subjects and healthy controls in social decision-making. Subjects with ASD showed a more consistent behavior than healthy controls in the trust game and the dictator dilemma. The present findings provide evidence for impaired social learning in ASD.

Reciprocity as a trigger of social cooperation in contemporary immigration societies?

While the system stabilizing function of reciprocity is widely acknowledged, much less attention has been paid to the argument that reciprocity might initiate social cooperation in the first place. This paper tests Gouldner’s early assumption that reciprocity may act as a ‘starting mechanism’ of social cooperation in consolidating societies. The empirical test scenario builds on unequal civic engagement between immigrants and nationals, as this engagement gap can be read as a lack of social cooperation in consolidating immigration societies. Empirical analyses using survey data on reciprocal norms and based on Bayesian hierarchical modelling lend support for Gouldner’s thesis, underlining thereby the relevance of reciprocity in today’s increasingly diverse societies: individual norms of altruistic reciprocity elevate immigrants’ propensity to volunteer, reducing thereby the engagement gap between immigrants and natives in the area of informal volunteering. In other words, compliance with altruistic reciprocity may trigger cooperation in social strata, where it is less likely to occur. The positive moderation of the informal engagement gap through altruistic reciprocity turns out to be most pronounced for immigrants who are least likely to engage in informal volunteering, meaning low, but also high educated immigrants.

Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.